HB 356 creates the “Stated Value Policy Act” and adds a new subpart to Louisiana insurance law governing residential property coverage. The bill requires insurers that offer residential property policies in Louisiana to make a stated value policy option available to homeowners upon request, allowing coverage to be based on a homeowner-declared value rather than only on market value. If an insurer offers this option, it must prominently disclose it in policy proposals, agreements, and renewals.
The bill also sets conditions for homeowners who choose this coverage. A homeowner must provide documentation of any mortgage balance and a mortgage certificate from the clerk of court, and insurers may not issue a stated value policy for less than the verified outstanding mortgage balance. For mortgaged homes, the insurer must obtain a signed warning acknowledging that choosing coverage equal only to the unpaid mortgage balance could leave the homeowner exposed to major losses, including loss of equity, if the home is destroyed or severely damaged. For homes without a mortgage, the homeowner may request any stated amount of coverage, subject to the bill’s other requirements.
Impact
HB 356 changes Louisiana insurance law by creating new statutory duties for residential property insurers, new disclosure and documentation requirements for homeowners, and new consumer-information obligations for the Department of Insurance. It directs the commissioner of insurance to publish and periodically update educational materials explaining stated value policies, their risks, and how they compare with other coverage types, and to make those materials available on the department’s website and through periodic distribution to homeowners. The bill also authorizes enforcement through administrative rules and existing penalties under Title 22, including fines and possible suspension or revocation of an insurer’s license.
Sentiment
The bill appears to have received generally favorable legislative support. It passed the House 80-18, passed the Senate unanimously 39-0, and then cleared House concurrence 81-12, suggesting broad agreement on the need to expand consumer choice in homeowners insurance. The vote pattern indicates that most lawmakers supported the measure, with a smaller group remaining opposed or unconvinced even after Senate amendments.
Contention
The main point of contention is the policy tradeoff between consumer flexibility and consumer protection. Supporters likely view the bill as giving homeowners more control over insurance coverage and potentially a lower-cost option tied to mortgage balance or a self-selected value. Opponents may be concerned that stated value policies could leave homeowners underinsured after a total loss or major damage, especially where coverage is limited to the unpaid mortgage balance rather than replacement cost. The bill addresses that concern through mandatory disclosures, required warnings, minimum coverage tied to mortgage balance, and consumer education from the insurance commissioner.