Some Ida evacuees may not be reimbursed by their insurers; new law expected to remedy the problem going forward

Published: Jul. 15, 2022 at 7:07 PM CDT
Email This Link
Share on Pinterest
Share on LinkedIn

NEW ORLEANS (WVUE) - As Hurricane Ida approached southeast Louisiana with potent winds many people got of its path, evacuating to other areas even though their communities had not ordered mandatory evacuations. And now a judge has ruled that Insurance Commissioner Jim Donelon was wrong to order insurance companies to reimburse them.

The judge said administrative law judge said it was an abuse of the commissioner’s discretion and that Donelon’s directive to insurers is invalid and unenforceable.

Donelon told the news media on Friday that unfortunately, people whose insurance company refuses to reimburse them are out of luck.

“I can’t remedy it retroactively but we think we fixed it going forward,” said Donelon.

He said he cannot appeal the judge’s ruling because the Louisiana Administrative Procedures Act does not provide a right of appeal.

Still, residents support what Donelon did to help them.

Ethan Vuljoin says the cost of living is already high and having to foot evacuation costs without being reimbursed makes things worse.

“I feel like yes because things are so expensive right now, it’s really hard, one if your house gets damaged all the things you have to do with that, all the expenses piling up and then you have to do an impromptu vacation,” he said.

Donelon says they knew all along that it was a close legal call but decided to err on the side of consumers which resulted in many insurers complying with his directive without challenge.

State Sen. Kirk Talbot worked with Donelon on insurance reform measures during this year’s legislative session.

“I’m glad that Commissioner Donelon, you know, stepped up and did that,” said Talbot.

The judge’s ruling came as a result of State Farm and Dover Specialty Insurance Company taking issue with Donelon’s order. President Joe Biden also asked insurers to reimburse Ida evacuees.

And a new law passed this spring by the Louisiana legislature is designed to remove any gray areas regarding insurers covering evacuees’ expenses.

“The purpose of the law is to ensure that insurance companies pay those additional living expenses regardless of whether a quote-unquote official evacuation was called,” said Talbot. He co-authored the legislation with Rep. Laurie Schlegel.

Talbot believes the new law is solid and will protect policyholders for the future.

“I believe the bill fixes the problem but we’re going to look into it, you know, I’m always leery of judicial rulings that it doesn’t have a domino effect on that legislation, so I’m going to confer with some lawyers at the Department of Insurance to make sure it doesn’t. I don’t believe it does,” he said.

Still, Talbot says if it turns out the new law needs to be tweaked, he will work to make that happen.

“Absolutely, we’ve already conferred with officials at the Department of Insurance,” said Talbot.

Vuljoin says insurers should do what they can to help customers.

“They do take advantage in this area and coastal areas where hurricanes are pretty extensive to begin with and pretty damaging, so I think really showing some humanity and helping people out would be greatly appreciated,” he said.

RELATED STORIES

Insurance agents race to find new coverage amid a mountain of policy cancellations

Nearly 100,000 Louisianans set to lose homeowners insurance this summer

La. lawmakers are among the thousands losing insurance coverage

See a spelling or grammar error in our story? Click Here to report it. Please include the headline.

Copyright 2022 WVUE. All rights reserved.