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It's nail-biting time for the insurance industry in Louisiana.
The fate of the industry is riding on two key state Supreme Court cases. Landry vs. Louisiana Citizens Property Casualty Insurance Co. and Sher vs. Lafayette Insurance Co.-both hurricane damage-related cases-carry with them major implications for the state's insurance market. Each case deals with the insurers' refusals to pay damages due to flooding, which is not covered by standard homeowners policies. In late February, the Supreme Court of Louisiana heard the arguments and is now deliberating. "If these decisions go against the industry, it'll be pretty devastating to say the least," Greg LaCost, regional manager for the Property Casualty Insurers Association of America, told BestWeek. Billions of dollars are at stake, according to LaCost, as well as the potential insolvency of some companies, should the ruling go against the industry. That would set a precedent that could "cripple the Louisiana economy," he noted. Robert Hartwig, president of the Insurance Information Institute, said the industry might have assumed the issues surrounding the two cases were settled by rulings at the federal court level. However, only the state Supreme Court can "speak authoritatively on an issue of state law," said attorney David Rossmiller, author of the Insurance Coverage Law Blog. |
