The Senate Insurance Committee will consider a bill Wednesday that would force homeowner’s insurance companies to disclose their annual losses and premiums by ZIP code.
While the individual insurance companies’ information would remain confidential, the Louisiana Department of Insurance would compile all of the data and post the totals online.
“I represent Plaquemines Parish, and it and some of the other coastal areas that were hit so hard, the rates have just been going up astronomically,” said Rep. Chris Leopold, R-Belle Chasse. “And perhaps that is warranted, but what gets us to that point?”
Making the loss information available will help consumers understand their property insurance premiums and determine whether their payments are in line, Leopold said.
Conventional wisdom says homeowners in the coastal areas of the state pay more for coverage because they face a higher risk of hurricane damage and other perils. But Leopold said that isn’t always the case.
Data from nearby states revealed that the homeowner insurance claims in so-called high-risk areas are often less than claims made in less-risky areas.
At this point, it’s unclear whether the additional information will reduce consumers’ insurance costs. The idea is to expose the relationship between claims paid and the premiums charged by geographic area.
The bill would require the insurance commissioner to publish the method insurance companies use to calculate premiums.
Leopold doesn’t know if there’s a simple way to explain that process to consumers, but said there has to be a better way.
The bill, modeled on legislation passed two years ago in Alabama, passed unanimously in the House.
Leopold said he’s discussed the legislation with Senate Insurance Committee Chairman Dan “Blade” Morrish, R-Jennings.
“I don’t anticipate any problems in his committee,” Leopold said. “As we move forward, I think we’re going to be OK.”
The insurance industry was in opposition at the beginning of the process, specifically in the House Insurance Committee, but that resistance has dwindled, Leopold said.
In two years, assuming the bill passes the Senate and the governor signs it, Leopold said the state will be in a better position to assess the legislation’s impact.