Louisiana Voluntary Discount Legislation

A newly enacted law in Louisiana underscores the growing prominence of IBHS’s FORTIFIED Home™ and FORTIFIED Commercial™ programs in shaping resilience along the Gulf Coast.

On June 1, Louisiana Governor John Bel Edwards signed Act 30 into law. The new law is applicable to filings after July 1, 2022.

The legislation creates a regulatory process for insurers, on a voluntary basis, to file for discounts/rate reductions for wind coverage in residential and commercial buildings built or retrofitted to the IBHS FORTIFIED Home and FORTIFIED Commercial standards. The goal of the legislation is to supersede a component-based mitigation previously in place, with a new system focusing on FORTIFIED. However, it does allow grandfathering of policies that provide discounts under the old component-based system, as well as other voluntary adjustments in deductibles and/or other credit rate differentials.

Properties eligible for voluntary discounts under the new law include single-family residential property, commercial property, modular homes, and manufactured homes. While our FORTIFIED Home and FORTIFIED Commercial programs are firmly in place, IBHS currently is exploring the feasibility of a FORTIFIED designation program for manufactured homes, and we have been working with Louisiana state agencies on potential FORTIFIED designations for several low-income, multifamily housing projects in the state (these currently would fall under the FORTIFIED Commercial rubric, although we are also developing a separate FORTIFIED Multifamily designation program).

The statute directs the Commissioner of Insurance to promulgate necessary regulations. The Department plans to wait and see what the companies file but are not planning any action at this time.