Covering Louisiana

Feb 6, 2013 1:55 PM by AP

Residents: Insurance canceled over sinkhole

BATON ROUGE, La. (AP) - The Louisiana Department of Insurance is investigating reports that insurers are not renewing homeowner's policies of residents evacuated due to the large sinkhole in Assumption Parish.

Insurance Commissioner Jim Donelon told The Advocate that his office has not received a formal complaint but has been asked by the parish Police Jury to look into the matter and more recently was informed by the Independent Insurance Agents of Louisiana about alleged non-renewal of policies.

"We are looking into the subject generally because we're getting reports of non-renewal here and there," he said.

He said his office would look at the "totality of the situation," including the rights of residents to be covered by Louisiana Citizens Property Insurance Corp., the state's insurer of last resort.

In interviews with two evacuated residents and parish officials in the past two weeks, some said insurers were not renewing or had threatened not to renew their policies because their homes had been left vacant for more than 30 days.

In another case, a non-renewal letter cited "increased hazard" and a "substantial change in risk" after a resident filed a claim due to tremor-induced damage. The claim was also denied. The resident and company agreed to part ways.

Residents also reported agents asked them to consider policies designed to cover vacant dwellings.

Parish President Martin "Marty" Triche, who has spoken with a few of the same affected residents, said the non-renewals on the basis of vacancy are "totally inappropriate because there is a mandatory evacuation."

Neither Donelon nor Triche had a firm fix on how many people have been affected.

Sonny Cranch, a spokesman for Texas Brine Co. LLC, said the company asked residents about insurance concerns during the company's weekly assistance check distribution on Thursday.

He said the company found two instances where policies were not renewed and two more where residents had questions.

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