Louisiana Homeowners' Insurance – Directive 220

On 24 January 2023, the Louisiana Department of Insurance (LDI) issued Directive 220 directing all property and casualty insurers and surplus lines insurers issuing homeowners policies in Louisiana to comply with La. R.S. 22:1338, enacted by Act No. 558 of the 2022 Regular Session of Louisiana Legislature.

All insurers that issue homeowners' policies in Louisiana are directed to amend existing policy forms or to develop a Louisiana endorsement that incorporates the statutory provisions of La. R.S. 22:1338, which requires an insurer, at the request of an insured, to render an advance payment equal to the estimated value of three months of additional living expenses (ALE) to an insured who has sustained a total loss to an insured dwelling caused by a covered peril if the insured has ALE coverage.

The newly enacted statute also requires that further ALE payments shall be payable upon submission of satisfactory proof of loss if the cost of insured ALE exceeds the amount previously advanced.

The LMA will not be developing a model market endorsement. We believe that the Insurance Services Office’s endorsement HO 01 17 03 23, which is available on the Lloyd’s Wording Repository, is compatible with Directive 220 and effectively incorporates the statutory provisions of La R.S. 22:1338.

Faizan Mahmood
Executive, Legal Trainee