The “More Than 3-Year Rule”

In addition to insurance being expensive, there are too few insurance companies offering Homeowners policies in Louisiana. You need more choice.

There are many companies who write Homeowners policies in other coastal states – including nearby states like Texas, Mississippi, and Alabama that have the same kinds of hurricanes as we do – that don’t do business in Louisiana.

One reason those companies choose not to do business here is our restrictive laws, that are unlike anywhere else in the country.

The #1 example of that government overreach is Louisiana’s “More than 3-year Rule”. We are the only state in the country that has such a law – and the only place on the planet that has such a restriction.

The law states that if an insurance company writes a homeowners policy on a home for more than 3 years, they cannot cancel or non-renew that policy for almost any reason. They MUST continue to insure the house no matter what.

Insurance companies hate that law, and many choose not to write any policies in our state because of its negative effect on their business.

We must reduce the negative effect of the “More than 3-year Rule” on insurers in our state.

However, we believe that repealing the law during our current insurance crisis would cause significant pain for people in Louisiana that are currently protected from non-renewal by the statute.

HB 611 by Representative Gabe Firment and SB 370 by Senator Adam Bass provide a glide path towards a free market for insurers while protecting policyholders from widespread nonrenewals.
- The bill sunsets the “More than 3-year Rule” so that it no longer applies to new policies going forward.
- It also allows insurance companies to non-renew up to 5% of their policies currently protected by the law, each year.
  - This minimizes the impact on the overall market, allowing the relatively few policyholders that are nonrenewed time to find coverage with another insurance company.