Political Horizons for Dec. 07, 2008

• By MARK BALLARD
• Capitol news burea
• Published: Dec 7, 2008 - UPDATED: 12:05 a.m.

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The hurricanes in September toppled many a tree and damaged many a house. In November, hurricanes Gustav and Ike destroyed the congressional aspirations of state Sen. Don Cravins.

Or at least he says so.

The Opelousas Democrat was mounting a credible challenge to U.S. Rep. Charles Boustany of Lafayette, the Republican incumbent for the 7th Congressional District that stretches roughly west from near Interstate 49 to the Texas border. Then Boustany started running commercials blaming Cravins, chairman of the state Senate Insurance Committee, for writing the bill that allowed insurance companies to raise named-storm deductibles prior to the hurricanes.

The “named-storm deductibles” are to the owners of homes 200 miles from the coast in 2008, what “water versus wind” is to the property owners around New Orleans in 2005. They were the way insurance companies shimmied out of paying for the damage their policies were bought to cover.

“That’s the bill I’ve got to live with the rest of my life,” Cravins said last week. “Every time I get the call, it’s, ‘What in the hell were you thinking?’”

Mostly, Cravins said, he was thinking about keeping inland homeowners from paying the high deductibles insurers were levying in 2008 policy renewals on properties near the coast. The Louisiana law, which requires insurers to charge the same deductible across the state, was designed years ago to give insurance companies pause before they hammered property owners in coastal parishes.
Since hurricanes Katrina and Rita in 2005, private insurers haven’t wanted to sell policies in Louisiana. So, the fear that homeowners in north Louisiana would take their business elsewhere if deductibles were raised in south Louisiana, evaporated, Cravins explained.

Previously, property owners were required to pay the first $500 or $1,000 to repair damage caused by a hurricane. Now, when a named storm moves into the Gulf of Mexico, property owners have to pay an amount equal to a percentage of the building’s value before insurance kicks in. That’s up to $7,500 out of pocket on a house valued at $150,000. Except for the most extreme damage, repairs now are paid solely by the homeowners.

About 3,000 people phoned the state Department of Insurance to complain. The U.S. Small Business Administration, to which 9,530 homeowners and 1,102 businesses turned for help after being abandoned by their insurance companies, reported loaning $509.3 million to repair Gustav and Ike damage.

Boustany’s commercials tapped widespread anger, Cravins said. The resentment spread as voters went online to check how their state legislators voted on Senate Bill 160. Cravins said he told his colleagues who phoned after Boustany’s spot: “What happened to me is going to happen to you. If I’m running against you, I’m going to bring that vote up. That’s the cost of leadership.”

Boustany’s commercial was not baseless.

SB160’s digest, a summary of the bill, said the measure’s purpose was to give insurance companies “authorization to increase a policy deductible for named storms.” The actual wording that changed existing law spoke only of adjustments and deviations to allow for different deductibles in divergent parts of the state. But most people read only a bill’s digest.

 The Insurance Department is in the process of finishing the procedures for using all this new flexibility to give some homeowners in nonhurricane zones a break.

Cravins said he wants to hear from Allstate Insurance Group, State Farm and Louisiana Farm Bureau Mutual Insurance Co., which together account for more than half of property policies in Louisiana.