Louisiana Supreme Court reinstates suit against states Citizens Property Insurance group

Louisiana Supreme CourtThe Louisiana Supreme Court has voted to reinstate a $92.8 million suit against the state’s Citizens Property Insurance Corp. this week. The suit originated in early 2006 and claims that the state-run insurance organization was intentionally slow in adjusting insurance claims resulting from Hurricanes Katrina and Rita. The 24th Judicial District Court had awarded some 18,000 homeowners with roughly $5,000 after hearing the case. The action, however, violated state law and put the suit on hold for some time.

The ruling has found a staunch enemy in the state’s Insurance Commissioner, Jim Donelon. Per sources, the Commissioner chided Supreme Court judges for being “legally and morally deficient” and calling the ruling unfair to Citizens Property Insurance. Donelon has announced plans to introduce new legislation next year that would ban class action lawsuits from being filed against the insurance organization. The Citizens board of governors will meet in January next year to consider options on how to deal with the issue. Chief executive Richard Robertson says that pursuing an appeal may be the best option.

For now, the ruling is good news for consumers as many will begin to see the claims they had filed years ago come to fruition. The ruling also brings some risk, however, as higher insurance rates may be necessary in order to cover the cost of the suit. Commissioner Donelon claims that the ruling is unfair across the board and has expressed his want to overturn the Supreme Court decision.

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