Navigating the hurricane insurance claims process

Updated: Oct. 13, 2020 at 7:22 PM CDT
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LAKE CHARLES, La. (KPLC) -As if Hurricanes Laura and Delta were not enough, many in Southwest Louisiana now feel they are suffering another storm as they try to get fair payment from their insurance companies.

It’s well publicized that, generally, residents don’t have to pay two huge hurricane deductibles in one season. But, you may not realize you likely face a smaller deductible for Delta.

After paying huge hurricane deductibles, plenty of consumers thought they were done with deductibles when Delta hit. Well, not so. State Insurance Commissioner Jim Donelon confirms most companies do charge the “all perils” deductible which usually runs between $500 and $2000.

Donelon says he’s been told at least one company is waiving deductibles for those hit by Laura and then Delta.

“I cannot make companies do, what USAA, I do not have the power what USAA has voluntarily announced they will be doing,” said Donelon.

There are also certain so-called “surplus lines” companies that write in “hard markets” or “high risk areas” and they can charge two hurricane deductibles.

“The chemical plants, the refineries, the docks and ports and high dollars things that the admitted carriers, the name brands, if you will, like State Farms, and Travelers and Allstate, USAA do not choose to write. And some of that is residential property. So, surplus lines companies operate in all fifty states in a virtually unregulated market. The admitted companies have to do things like get their rates approved before they can start doing business or increase rates, they have to be approved.”

“Surplus lines companies do not have to do that. Surplus lines companies also do not offer the safety net for failed insurance companies called the guaranty fund. They are not covered by the guaranty fund. But to protect the public from not knowing that, when an agent sells a surplus lines policy, it has to stamp on the cover of the policy, 'This policy is not protected by the Louisiana Guaranty Association in the event of the failure of this company,” said Donelon.

“The surplus lines is the unregulated market. In the residential market statewide, only 4 1/2% are sold by surplus lines companies," said Donelon added, “the coverage might be cheaper because it doesn’t have certain protections and coverage mandates that admitted carriers have like the limit on named-storm deductibles,” he said.

He says people who buy such coverage have to sign a form acknowledging that what they’re buying is not the norm and that they were advised that there is no guaranty fund coverage because such insurance does not have certain protections and that it was explained to them by their agent."

And many people are upset the insurance companies want to pay depreciated value when people paid premiums for replacement value. The consumer can claim the difference only after they show a receipt that they have replaced the item.

“That is not an uncommon complaint in all catastrophic events, that the company takes the position that they will only pay if you replace. They don’t pay if you choose not to. And that is a company to company, policy to policy decision that we are equipped to assist folks in reading their policy with them making and determining if that position is valid or not,” said Donelon.

Some just don’t feel they’re getting the value they deserve after years of paying premiums... Donelon says under some circumstances, consumers have valid complaints.

“There are reasonableness standards and penalties available, if a company acts unreasonable in the processing of a claim. If you have a loss and it’s covered by your insurance and you have evidence if your loss, pictures, receipts, etc., then they have to tender without condition the amount, a reasonable amount, to compensate you, to make you 100% whole for whatever coverage you had available, within a prescribed period of time, or be subject to penalties added onto the amount they owe you. And that generally has a chilling effect on companies acting unreasonably, because there are many class action lawyers out there who are happy to take up the cause of large numbers of policy holders against a company, if it’s a practice that is found to be prevalent,” said Donelon.

“We now have 220 pending complaints from consumers related to Laura damage and seven related to Delta,” said Donelon .

Donelon’s advice to consumers is to always buy through an agent. “Buying direct is an option, over the internet or by 800 number to a national company is sometimes cheaper, certainly easier. You can do it at your computer at home or with your phone. But the professional services that you get from an agent is worth the commission that they get paid by the companies they represent, because it is a very complex, very sophisticated, very expensive and very vital part of everybody’s life, insurance is. And it takes an expert to advice you through your needs versus the best company and the best price to meet those needs,” he said.,

The Louisiana Department of Insurance (LDI) Office of Consumer Advocacy and Diversity will be returning to Lake Charles for the re-opening of the Resident Resource Center to assist residents affected by hurricanes Laura and Delta. LDI staff will be providing information on filing insurance claims, rebuilding after the storm and answering consumer questions about insurance. Staff will be available to assist Wednesday, October 14 through Saturday, October 17. Assistance will be available between 10 a.m. and 4 p.m. each day.

Beginning Monday, October 19, LDI staff will be available Monday through Friday each week from 10 a.m. to 4 p.m. and on Saturdays from 10 a.m. until 2 p.m. for as long as there is demand for assistance with insurance questions.

The City of Lake Charles and the Louisiana Department of Insurance opened the resource center in September after Hurricane Laura. The resource center closed for several days because of Hurricane Delta.

Consumers can also call the LDI for assistance from the Office of Consumer Services at 1-800-259-5300 or

About the Louisiana Department of Insurance: The Louisiana Department of Insurance works to improve competition in the state’s insurance market while assisting individuals and businesses with the information and resources they need to be informed consumers of insurance. As a regulator, the LDI enforces the laws that provide a fair and stable marketplace and makes certain that insurers comply with the laws in place to protect policyholders. You can contact the LDI by calling 1-800-259-5300 or visiting

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