Political Horizons for Sept. 21, 2008

• By MARK BALLARD
• Advocate Capitol News Bureau
• Published: Sep 21, 2008 - UPDATED: 12:05 a.m.

• Print
• Email
• Save
• Twitter
• Social Media

• Del.icio.us
• Digg
• Facebook
• Reddit
• 

Emerging from the heated darkness last week I discovered, as many of my Baton Rouge neighbors have, that the great “win-win” fixes state government recently made to improve the insurance climate in Louisiana roughly translates into requiring individual property owners — rather than insurers — to pay for most of the damages caused by Hurricane Gustav.

It’s called the “hurricane deductible” and Insurance Commissioner Jim Donelon says it will be the one, “huge difference” between Gustav and hurricanes Katrina/Rita of 2005.

A hurricane deductible only applies to property damage from a named hurricane, such as Gustav. It means that, unlike three years ago, insurance money for repairs doesn’t kick in until the homeowner first pays the deductible, which is usually 2 percent to 5 percent of the home’s value. The owner of a home valued at $200,000 will have to pay the first $4,000 to $10,000 — depending on the individual policy — instead of the traditional $500 to $1,000.

Consider that the Insurance Department reports the average loss for the 1 million claims filed for Rita and Katrina was about $15,000.

Basically much, if not most, damage caused by Gustav in the Baton Rouge area will be paid for by individuals regardless of how much insurance they carry and how much they have paid for those policies over the years.

So many Baton Rouge homeowners find themselves wishing Gustav had caused more damage to their houses.

While happy that Citibank and other mortgage holders are protected, many area homeowners are wondering where to find upwards of the $20,000 necessary to replace the roof and damaged sheetrock.

Homeowners can take out disaster loans from the U.S. Small Business Administration to pay storm deductibles.

State and federal lawmakers are looking at different ideas to take some of the edge off high deductibles.

U.S. Rep. Don Cazayoux, D-New Roads, introduced legislation and is pressuring the Federal Emergency Management Agency to change its definitions to make federal recovery money available to homeowners who have to pay large hurricane deductibles.

“We hopefully can convince these people (at FEMA) that their position is not logical,” Cazayoux said Friday. “I wouldn’t give you any odds, but we’re working it.”

On the state level, Sen. Don Cravins Jr., who chairs the Senate Insurance committee and is running for the U.S. Congress seat across the Atchafalaya Basin, is looking at other ideas. Those plans include creating a tax credit to cover what homeowners pay for their portion to repair storm damage and developing a state fund that homeowners could pay into that would help offset future deductibles.

Some legislators are talking about doing away with hurricane deductibles altogether, Cravins said.