New law will force insurers to give discounts to homeowners under certain circumstances

Published: Jun. 2, 2023 at 10:28 PM CDT
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NEW ORLEANS (WVUE) - As Tropical Storm Arlene churns in the Gulf of Mexico, a state lawmaker is happy his legislation which aims to help property owners, has been signed into law by Governor John Bel Edwards.

Rep. Matthew Willard, a Democrat from New Orleans, sponsored House Bill 294, which became Act 1 when Edwards signed it into law recently after it won full legislative approval.

It requires insurance companies to give discounts to homeowners who harden their roofs. Roofs can be early casualties of storms and hurricanes.

“We passed a bill last year to create the Louisiana fortify roof program. What we discovered is that in that statute it was permissive for insurance companies to grant a premium reduction, meaning that homeowners would only receive a premium reduction if their company wanted to grant that. I didn’t like taking a chance on that,” said Willard.

State lawmakers are still working to finalize the funding for grants under the program that would give grants to homeowners to strengthen their roofs.

But Willard says the new law he sponsored stands on its own, in terms of requiring insurers to give discounts to homeowners--whether they foot the bill themselves or ultimately get state money to do the work. “So, if a homeowner decides to hire a contractor and build a fortified roof they’re now eligible starting on August 1 for a premium reduction. The fortified roof incentive program will award grants to homeowners with a homestead exemption up to $10,000,” he said.

And he says discounts have been sizeable in some other states that have incentive programs similar to the one Louisiana adopted.

“So, what we’ve seen in other states is possibly up to a 30% reduction on the wind portion of a homeowner’s insurance policy,” said Willard.

The state House of Representatives passed a budget for the new fiscal year containing funds for homeowners’ grants.

Senate President Page Cortez went before the House Appropriations Committee on Friday (June 2) to talk about the budget and the Louisiana Fortify Homes Program, which is the official name. “$10 million is a great start,” he said.

But some in state government think more money should be allocated to the program and there is a chance that could happen because the senate has not passed its version of the budget.

The Senate joins Gov. Edwards in wanting the House to agree to lift the state’s spending limit because there are huge surpluses. Not doing so could impact the roof program.

“If you don’t have the ability to expend it you’re putting it in a fund and saying, come get it and when they get there you say, sorry we can’t give it out because we have this thing called the expenditure limit but we didn’t want to raise, so we can’t give you the money,” said Cortez.

Rep. Bill Wheat is a Republican from Pontchatoula.

“I think we’ve put in a lot of hard work to get some good programs on the books and having the ability is certainly something that we have to keep in mind how we make decisions over the next week or so,” he said.

Willard agrees.

“We can’t go in and say we’re going to fund the fortify roof incentive program without also passing the budget, so I want everybody to be aware of that. It’s in the conversation with everything else that’s contained in the budget, as well as the supplemental appropriations bill,” he said.

Since Hurricane Ida many homeowners have seen significant increases in their insurance premiums and state lawmakers are looking for ways to attract more insurers and bring down rates.

“If we can fund the incentive program that means the state will start putting money into the hands of property owners with homestead exemptions to build to the fortified roof designation,” said Willard. “Another reason my bill is so important is because if the state is going to make this investment we need to make sure that the homeowners are receiving some type of benefit.”

By law, the legislative session must end by June 8 and the new budget year begins July 1.

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