State Insurance Commissioner Jim Donelon talks about a possible lawsuit between his office and State Farm Insurance over payments to south Louisiana residents who were forced to evacuate their homes because of Hurricane Ida.

Donelon says that insurance companies operating in the state could face fines or suspension for refusing to go along with his mandate to cover the temporary living expenses of policyholders who evacuated during Hurricane Ida. However, Donelon admits that he cannot force the companies in question to actually make the payments to policy holders, which is why, he says, the situation will end up in court.

Here's what Donelon told KEEL listeners:

"The issue is the mixed bag of evacuation orders...because this was such a late growing and ominous threat," Donelon says, "The point being there was not enough time to set up contra-flow. So, the mixed bag of some mandatory, some voluntary, some no-issue at all decisions by public officials was tantamount to a mandatory evacuation.

"Treat it as such, then impose your coverage...on the claims submitted for reimbursement."

Donelon then says he was shocked when he was told, in a conference call with company bosses, that State Farm would not waive its mandatory evacuation requirement to cover its customer's evacuation costs.

"(State Farm) has answered and refused to comply and do not think my order is lawful," he says, pointing out that during his tenure as insurance commissioner, there has been only one previous challenge."

So, with so many south Louisianans waiting on payment, will this case be on the legal fast track? "If I prevail, they will be ordered to go back and retroactively adjust these claims."

And then, the most interesting point of all, that most of the cases will result in no payment. "State Farm has, for most of their policies, a 5% deductible. That's a $10,000 deductible," Donelon says, "These expenses are typically $2,000. So, unless they're dealing with a policy holder with a lot of damage...they're not going to pay anything."

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