Loss Of Use Claims On Hurricane Insurance
This past August, Hurricane Ida rocked Southeast Louisiana making landfall as a Category with devastating 150 MPH winds. Important to note is that a statewide mandatory evacuation did not take place for Hurricane Ida because it increased in intensity so quickly, and officials did not want to increase hazards by having too many people leave at once.
After a certain time and with the hurricane rapidly approaching, many local authorities actually encouraged residents to shelter in place. Additionally, following the hurricane, many homes and businesses were without power for an extended amount of time. In some areas, officials insisted that they remain evacuated until power could be restored to the cities throughout Southeast Louisiana.
As there wasn’t a statewide evacuation order in place, many insurance companies have been reluctant to pay policyholders for loss of use claims.However, United States President Joe Biden and Louisiana Insurance Commissioner James J. Donelon both made requests and urges to Insurance Companies to act in good faith, as many residents are enduring a traumatic and devastating time.
Once the impact of Hurricane Ida was assessed, Commissioner Donelon encouraged insurance companies to waive the provision requiring an evacuation mandate be in place. Companies like USAA, Allstate, and others complied with the requests Donelon’s request except State Farm, leading the Commissioner to mandate his request instead.
Prohibited Use Coverage
Additional living expenses insurance found in homeowner’s policies typically includes loss of use coverage which provides for instances of “prohibited use.” In simplest terms, this insurance will provide reimbursement for expenses incurred due to the inaccessibility of a person’s home due to a state or local authority’s evacuation order or due to a physical barrier blocking the way. These types of claims will usually require the claimant to provide evidence that a civil order was actually in place at the time their expenses were incurred. Important to keep in mind is that flood insurance will not afford this type of coverage for loss of use.
Louisiana Commissioner of Insurance’s Directive 218
On September 7, 2021, through Directive 218, Commissioner Donelon called for insurers to pay for policyholders’ expenses which were incurred during the evacuation from Hurricane Ida. Over a month later, there are still many residents displaced from their homes and businesses because of “damaged infrastructure and dangerous living conditions,” especially in the parishes of Lafourche, Terrbone, Assumption, and the surrounding areas. Specifically, the order demands that insurance companies pay any claims for loss of use which resulted from Louisiana policyholders having to evacuate their homes and being unable to inhabit the premises stating: “Prohibited use coverage generally pays extra expenses for up to two weeks when an evacuation order prohibits policyholders from living in their homes. When homeowners have physical damage to their properties that is covered by insurance, additional living expense coverage will pay for longer term additional expenses if the home is uninhabitable.” The directive “applies to policies in the 25 parishes listed in Emergency Rule 47” which was imposed by Commissioner Donelon to prevent cancellations and non-renewals following Hurricane Ida. The Release also encouraged policyholders “to keep receipts for any extra expenses they face after a disaster.” They note that additional living expense coverage provides for “the expenses beyond a policyholder’s normal expenses for housing and food, such as the cost of a hotel room or apartment rental and reasonable restaurant meals when someone is unable to cook.” Prior to the directive, Commissioner Donelon released Bulletin-2021-07, which suggested that insurance companies could at their own discretion pay claims for loss of use even if a mandatory evacuation order wasn’t issued for the parish.
The Commissioner also encouraged residents, who are in need of assistance and may not have been covered at the time of their losses, to apply for individual assistance being provided through the Federal Emergency Management Agency (FEMA).
Consult with an Attorney
Southeast Louisiana is still feeling the after effects of the destruction brought on by Hurricane Ida. If you believe you are entitled to compensation for loss of use during Hurricane Ida, you should consult with our experienced attorneys at Cueria Law Firm LLC in order to maximize your claim. Your Insurance Company may not even tell you that your policy included this type of coverage. Our attorneys can walk you through the process of filing a claim and can organize any relevant documents to support it. Call today for a free consultation.
