Louisiana Implements Mediation Program for Hurricane Ida Claims

Louisiana has established a voluntary mediation program for the purpose of resolving property/casualty insurance claim disputes related to damage caused by Hurricane Ida, which struck Southeast Louisiana as a category 4 hurricane in late August.

Bulletin 2021-08 states its purpose “is to establish a voluntary mediation program for all authorized property and casualty insurers and surplus lines insurers (hereinafter ‘insurers’) and their policyholders.”

The program is intended for mediation of residential property insurance claims disputes of up to $50,000. It began Oct. 18, 2021, and expires June 30, 2022, unless terminated at an earlier date by the insurance commissioner.

The Louisiana Department of Insurance noted the success of a similar, mandatory, program established following the 2005 Hurricanes Katrina and Hurricane Rita prompted the creation of the voluntary mediation program for Hurricane Ida. There were approximately 12,000 mediations conducted under Emergency Rule 22 in the aftermath of Katrina and Rita and the success rate was very high, the department said.

The bulletin states that “either the insurer or the policyholder may make a written offer to the other party to engage in voluntary mediation under the Program. The other party may accept or reject the offer of mediation.”

The cost of the mediation is set at $600; the mediation session can last up to 90 minutes. If an agreement is not reached during that time, the parties may continue the mediation “but will be responsible for any additional mediation expenses at the mediator’s standard rate,” the LDI said.

Hurricane Ida is the costliest natural disaster in 2021 in the U.S. so far and will be ranked among the top five most costly hurricanes on record for the country. Ida’s total cost will likely increase further, according to a report from the NOAA National Centers for Environmental Information.