In the aftermath of Hurricane Ida, policyholders across South Louisiana complained when insurance companies, often without warning, bounced their claims around a seemingly endless chain of adjusters.
Some faced as many as five adjusters in the first three months after the storm. With each change, the claim process essentially starts all over again.
Filled with complaints, state Sen. Joseph Bouie, Jr., a Democrat from New Orleans, filed Senate Bill 13that would prohibit insurance companies from assigning more than three adjusters to work on a single claim.
Bouie said he suspects insurance companies use adjuster-swapping tactics to wear policyholders down and make them settle for less. In his opinion, three adjusters are enough to correctly estimate damages on a claim.
“Why do you need to have a fourth, fifth, sixth or seventh or eighth adjuster?” Bouie said Wednesday during a Senate Insurance Committee hearing where his bill was considered.
But other lawmakers and insurance industry lobbyists questioned the cap. Several said they feared “unintended consequences” in setting the limit and wondered if it could harm consumers.
“There’s no way this is going to work during a natural disaster like we’ve seen in recent years,” said state Sen. Robert Mills, R-Minden.
Bouie said he asked critics in the insurance industry to help him find a roof that would work for them, but was met with shackles. He said that without putting the parameter in place, there is no way of knowing that it won’t work.
“Give me a number then or give me some other option that says that’s how we’re going to approach this issue,” Bouie said.
Senate Insurance Chairman Kirk Talbot, R-River Ridge, noted that the upper house Monday approved Senate Bill 198, which would require insurers to send policyholders a written status report on their claim if they are assigned three or more adjusters in a six-month period. The measure would also require insurers to provide the insured with a primary point of contact.
Eric Holl, executive director of Real Reform Louisiana, a nonprofit organization that advocates stronger protections for consumers, said Bouie’s legislation allows policyholders to “put their feet on the ground.”
“We have to give policyholders some control over this situation,” Holl said. “There has to be a limit somewhere.”
But Talbot wondered what might happen if a consumer gets to their third adjuster and still isn’t satisfied.
“What if you’re on a third adjuster and it’s terrible?” Talbot added. “And that?”
Lee Ann Alexander, a lobbyist for the American Property Casualty Insurance Association, said insurers should have flexibility after a catastrophe to adjust claims, adding that a hard limit could hurt consumers.
“You might be very upset to find out that the fourth adjuster that would come out is the one that will say your ceiling was totaled,” Alexander said.
State Senator Barrow Peacock, R-Bossier City, noted that existing law defines an adjuster as “a person who investigates or adjusts losses on behalf of an insurer.”
“Anyone who works at that company that collects that file is technically an adjuster,” Peacock said, noting that the three-adjuster limit could be hit faster than expected.
Policyholders will often interact with at least two adjusters after filing a claim. The first investigates the damage on the ground, takes photos and measurements, and sends a report with cost estimates. A desk adjuster, working remotely, then evaluates the field report and makes a decision on whether to write a check.
Bouie said he only intended to put a limit on the number of adjusters physically going out to inspect a policyholder’s property.
Jimmy Ordeneux, a lobbyist who represents the Louisiana Farm Bureau, said there are some circumstances where more adjusters are better.
“If you had a choice as a homeowner… do you want one person to adjust the entirety of their claim as it drags on or if you could get 10 people more efficiently, would you prefer the latter as long as it didn’t slow you down? the process,” Ordeneux said.
State Sen. Katrina Jackson, D-Monroe, suggested amending Bouie’s bill to require insurers to extend their coverage of policyholder living expenses after a certain adjuster threshold is passed.
“We can’t leave our constituents where they are and that’s homeless, with claims six months to a year, with 20 claims adjusters,” Jackson said.
State Sen. Jeremy Stine, R-Lake Charles, said insurers’ adjuster-sharing tactics are “clearly a game” to wear down policyholders and suggested a measure that would require insurers to obtain consent from policyholders before change adjusters.
Noting that the committee didn’t seem interested in a cap on adjusters, Bouie volunteered to defer his bill so he could work on amendments.