Insurance Department fields fewer calls from residents

• By TED GRIGGS
• Advocate business writer
• Published: Oct 2, 2008 - Page: 5A - UPDATED: 12:05 a.m.

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The state Department of Insurance has fielded close to 2,000 hurricane-related complaint calls in the 30 days since Hurricane Gustav, roughly one-tenth of the number that poured in following hurricanes Katrina and Rita.

“We had 20,000 a month for six months,” Insurance Commissioner Jim Donelon said Tuesday, “and it slacked off from there.”

There were so many complaints that consumer counselors from just about every state insurance department came to Louisiana to help out at disaster recovery centers, Donelon said. Compared with Katrina and Rita, the 2008 hurricane complaints have been minimal.

The predominant complaint has been about hurricane deductibles, with the next most-frequent complaint about receiving additional living expenses, spokeswoman Judy Wright said. In the past two weeks, however, the department has gotten more calls about additional living expenses than the deductibles — some of which are as much as 5 percent of the insured value of the house.

Donelon said there’s no question that the hurricane deductibles have reduced the amount of money that insurance companies have had to pay because of Gustav.

That’s both good and bad for consumers.

On the one hand, the state wasn’t hit as hard as insurers feared before the storm made landfall, Donelon said, and the widespread use of hurricane deductibles has helped stabilize homeowners rates.

In 2006, the average homeowners rate increase was 12.5 percent, Donelon said. In 2007, the average increase was 3.5 percent.

Through August, the average increase was 0.6 percent, Donelon said, and he doesn’t expect that to change much.

However, the deductibles made consumers responsible for a larger share of the damage, Donelon said, and that has been a heavy burden for many consumers.

Donelon said he would like to see federal legislation to create property savings accounts patterned after the health savings accounts, which allow consumers to set aside money tax-free to pay for current and future medical expenses.

Wright said consumers are also complaining on a regular basis about untimely responses from adjusters and insurance companies.

The number of complaints has slowed and are now down to about 60 per week, she said.