With the takeover, an estimated 30,000 Access Home and State National Fire customers will be able to avoid the task of finding alternative insurance and possibly turning to the Louisiana Citizens Property Insurance Corp., the state-sponsored insurer of last resort, for coverage.
The transaction was approved today by Insurance Commissioner Jim Donelon. The agreement is now on its way to the 19th Judicial District Court for approval, with the goal of finalizing the plan by the end of the year. LDI cannot reveal the identity of the acquiring insurer until both parties agree on terms and the necessary court approvals are obtained.
"The assumption of the policies is fantastic news," said Commissioner Donelon. "The majority of policyholders will not have to worry about finding new coverage." Their policies will be automatically transferred to the new insurer at the same rates and terms as Access Home and State National Fire."
Seven private insurers expressed interest in the policies, and three companies formally submitted bids to the receiver, demonstrating the resilience of the Louisiana insurance market. The new insurer is paying the remaining unearned premium on each policy to acquire the business, which accounts for 1% of the Louisiana homeowners insurance market. The transaction is expected to go into effect on December 1, 2021.
The Louisiana Insurance Guaranty Association (LIGA) is in charge of claims resulting from Hurricane Ida and other events that occurred prior to December 1. Any insurance claims made on or after December 1 will be covered by the new company.
Beginning on December 1, policies will be rewritten using the new insurer's rates and policy forms as they come up for renewal each month. Customers who have been with Access Home or State National Fire for more than three years will be protected under Louisiana's one-of-a-kind three-year consumer protection statute, which makes it difficult for companies to not renew or change rates or coverage. These transfers will take place even if the customer's home was damaged by Hurricane Ida and has yet to be repaired.
In accordance with Louisiana's three-year law, the new insurer will have the option not to renew policyholders who have been with Access Home or State National Fire for less than three years. These customers may need to find new insurance coverage.
Louisiana Citizens provides coverage to any property owner who is unable to obtain coverage from a private company, including storm-damaged homes.
Customers with Access Home or State National Fire should contact their insurance agent or the receiver at 225-201-0107 if they have any questions about their coverage.
Any Access Home or State National Fire customer who has a question about an insurance claim with a loss date prior to December 1 should contact LIGA at 225-277-7151 or visit https://www.laiga.org/. LIGA can pay up to $500,000 in claims per policyholder.
"This agreement benefits Access Home and State National Fire customers," said Commissioner Donelon. "It's a victory for LIGA, which avoids liability for future claims." It's a win for Louisiana Citizens, who will avoid having to implement new policies. Indeed, it is a win for every Louisiana property insurance policyholder who bears the risk of Citizens, our last resort market."
The Louisiana Department of Insurance is a state agency that regulates insurance in the state of Louisiana. The Louisiana Department of Insurance works to increase competition in the state's insurance market while also providing individuals and businesses with the information and resources they require to be informed insurance consumers. As a regulator, the LDI enforces laws that ensure a fair and stable marketplace and ensures that insurers follow the laws that protect policyholders. You can reach the LDI by dialing 1-800-259-5300 or going to www.ldi.la.gov.