State Rep. Troy Hebert shared their fight to lower property insurance
LOUISIANA, La. (KLFY) – Everyone from businesses to homeowners is seeing the rising cost of insurance and how it’s affecting their pocketbooks and becoming unaffordable for some. However, efforts to get more insurance companies to the state to help reduce rates are possible after House Bill 611 to remove the three-year rule was passed.
“Tim Temple, our new commissioner, had a package of bills in this last legislative session. After listening to the reinsurance market, listening to insurance companies, and understanding that we need to create a better environment to attract more insurance companies,” said Troy Hebert, State Representative District 31. “The only way you're going to possibly get to a point where your insurance rates would start to decrease is through the free market. Increasing competition; more insurance companies coming into the market, therefore then offering you lesser rates to get more business.”
Hebert said the three-year rule which Louisiana was the only state in the entire country to have on its book was a huge thorn in the side of the reinsurance market. “The three-year rule basically set out there after someone has been with the insurance company for three years. They could not be let go by their insurance carrier,” explained Hebert. “Well, the problem with that rule is, one, the insurance company is not allowed to mitigate their risk to that law.”
Therefore, they got rid of the three-year rule. So insurance companies will be allowed to mitigate their risk. They could let go of policies up to 5% per parish. However, they just can't go into one general area and just drop it. Also, everybody in that one general area would be overseen by the insurance commissioner Tim Temple.
“The pros to this bill are you're creating a scenario to hopefully get more insurance companies and into the state of Louisiana as part of a package of bills. Not just that one will do it but that one has been a really big thorn in the side of the reinsurance market and because of it, plays one piece of the puzzle into why we're seeing higher rates,” he said. “So the pro of getting the three-year rule off the books is that insurance companies will feel like they can mitigate the risk better and then hopefully with all the other bills that were passed during the session, that combination will bring more insurance companies to Louisiana.”
He said the con is there will be some policyholders who will have the need to move to the state insurance citizens plan or have to wait for someone else to write their policy.
“From an insurance standpoint, in the end, there's not one law that you can pass to mandate that an insurance company reduce their rates. Mandates will clearly keep insurance companies from coming to Louisiana. What we've tried to do is follow the commissioner's package of bills, and create an environment that insurance companies feel they would like to come back or come to Louisiana and get some good insurance companies riding here in our state. Get the competition increased because if we get an opportunity to see lower insurance rates, it's only going to come through the free market,” he said.
Furthermore, if you are worried about purchasing insurance and the deadline as we are in hurricane season Hebert said you have until the storm is actually named to still get insurance. Once that storm is named, they will not write policies until after, the storm is over and everything is clear.