Prohibits insurers from the nonrenewal of residential insurance policies when homeowners timely mitigate risks

HB 408 adds a new section to Louisiana's insurance code that restricts property insurers from declining to renew residential homeowners' insurance policies when the policyholder remedies the specific deficiency cited by the insurer within ninety days of receiving notice of nonrenewal. The statute defines risk mitigation as the homeowner's resolution of the particular reason for nonrenewal stated in the insurer's notice. Additionally, the bill prohibits insurers from using those same remedied deficiencies as a basis to increase rates or premiums upon policy renewal. The legislation also imposes a written notice requirement, mandating that insurers provide policyholders with a written explanation of their reasons for nonrenewal through delivery, mailing, electronic transmission, facsimile, or personal delivery, with the time period commencing on the mailing date when the insurer chooses postal delivery.

Homeowners facing nonrenewal notices will benefit from a grace period to address identified defects such as roof damage, deferred maintenance, or other property conditions that prompted the insurer's decision to decline renewal. Once a homeowner completes the necessary repairs or corrections within the ninety-day window, the insurer must renew the policy at existing rates. Insurance companies lose the ability to decline renewal based on conditions the homeowner has since corrected or to penalize policyholders with higher premiums for having remedied previously cited problems. This mechanism protects homeowners from coverage loss while incentivizing prompt repair work, though insurers retain the ability to nonrenew based on other factors not specified in their original notice.

This statute operates within Louisiana's broader regulatory framework governing homeowners' insurance nonrenewal, which exists under Title 22 of the Louisiana Revised Statutes. The new provision functions as a constraint on insurers' discretionary nonrenewal rights, which have historically been more expansive in Louisiana law. The measure addresses concerns in the residential insurance market by ensuring that policyholders who take corrective action receive continued coverage and are not penalized for doing so. The statute respects the remaining nonrenewal prerogatives of insurers while creating an affirmative obligation to disclose reasons and to forbear from nonrenewal when homeowners act timely to cure the identified deficiency.