[StBernard] LA Fair Plan

[Westley Annis]

Princess,

This is all part of the original law that created the Fair Plan.  

The Fair Plan is a state-run entity that sells homeowners insurance (modeled
after a similar entity in the state of Florida).  Originally intended as
insurance of last resort, it is turning into insurance on only resort.

With the losses incurred because of Hurricanes Katrina and Rita, and it's
relative young age, it never had the opportunity to build enough reserves to
handle all claims.  If this was a private insurance company, it would have
been declared insolvent.

Instead, all Louisiana taxpayers, not just those who have coverage under the
Fair Plan have to make up the difference.  This is done through a surcharge
on insurance policies issued by other insurance companies.  The surcharge
will be on added to your premiums every year until the Fair Plan has built
up a sufficient reserve.  The last I heard, I think they were talking about
4-5 years before the surcharge will be removed.  That is assuming no other
major storms strikes Louisiana.

Westley

-----Original Message-----
Did anyone else notice that when they renewed their insurance policy that it
included money for the LA Fair Plan?  I have insurance with State Farm but
still had to pay into the LA Fair Plan.  I was told it is a new rule.  Why
should I have to pay into a plan that I will not be able to file any losses
against?  Was I still in my Katrina fog when this rule passed?  Can someone
enlighten me on this?
 
Princess