NEW ORLEANS – The Louisiana Supreme Court on Friday upheld two new state laws giving policyholders more time to sue their insurers or file claims over damage from hurricanes Katrina and Rita.
The Louisiana attorney general's office had asked the high court to review the laws after a state judge said they were constitutional. Although it is unusual for the party that wins a ruling to seek a review from a higher court, Attorney General Charles Foti said he wanted the matter solidly settled.
The one-year extension is "both appropriate and reasonable in order to protect the rights of the citizens of Louisiana and their general welfare," Justice Chet Traylor wrote in the ruling.
The ruling means that homeowners, renters, condo owners, drivers with auto insurance and other nonfederal flood insurance policyholders have up to Sept. 1, 2007, to file lawsuits resulting from Katrina damages and up to Oct. 1, 2007, for Rita damages.
"These acts simply give victims of Katrina and Rita additional time to access the courts if they need to," Megan Terrell, an attorney for the state, told the high court.
An attorney for Allstate Insurance Co., the second largest homeowner insurer in Louisiana, said the laws could hinder the recovery by sending a message to the business community that the Legislature can change existing contracts.
"The problem is the Legislature is saying, 'We are going to change the agreement in a hurricane-prone state,"' said Philip Franco. "That doesn't encourage rebuilding."
Ten of the state's major insurers were listed as defendants in the suit.
Lawmakers had approved the new laws in the latest legislative session, extending the claims deadlines for Katrina and Rita victims until two years after the 2005 storms struck on Aug. 29 and Sept. 24.
The laws apply to homeowners, personal property, tenant, condominium owners and commercial property insurance — and certain automobile, crop and livestock insurance policies. Terrell said the laws don't apply to the National Flood Insurance Program, which is governed by federal law.
On Friday, the justices questioned attorneys about what flood damage might be covered and the length of time allowed by Louisiana to sue over settlements.
Justice Bernette Johnson said Texas has a four-year period, Mississippi and Florida — both states where hurricane damage is frequent — had three-year periods.
The justices made it clear they wanted to move quickly when they ordered a lower court judge to listen to arguments and decide the case on Wednesday.