On January 24, 2023, the Louisiana Department of Insurance (LDI) issued Directive 220, regarding additional living expense (ALE) coverage compliance, to all property and casualty insurers and surplus lines insurers issuing homeowners policies in Louisiana.
Specifically, the LDI directs insurers to comply with La. R.S. 22:1338 (Act No. 558), which was enacted through House Bill 831 (2022) and went into effect on January 1, 2023. The Directive states that La. R.S. 22:1338 "requires an insurer, upon the request of its insured, to render an advance payment equal to the estimated value of three months of additional living expenses (ALE) to any 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, after the advance period, shall be payable upon submission of satisfactory proof of loss if the actual cost of incurred ALE exceeds the amount previously advanced."
Insurers are directed to amend any existing policy forms or to develop a Louisiana endorsement that incorporates the statutory provisions of La. R.S. 22: 1338. Any proposed policy form filings containing language referencing La. R.S. 22:1338 by authorized insurers are subject to review and approval by the LDI and must be submitted on or before July 1, 2023.
For questions regarding Directive 220, please contact the Deputy Commissioner of the Office of Property and Casualty at (225) 342-5203 or electronically at public@ldi.la.gov.
