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ENROLLED
2026 Regular Session
HOUSE BILL NO. 825
BY REPRESENTATIVES BRAUD AND MANDIE LANDRY
1 AN ACT
2 To amend and reenact R.S. 22:1346.1(introductory paragraph) and (2), 1346.2, 1346.3(A)
3 and (C), 1346.4, and 1346.5 (A)(1) and (4) and (B)(1), relative to stated value
4 policies; to define certain terms; to clarify valuation standards; to provide for certain
5 notices; to provide for the information dissemination requirements of the department;
6 to make technical changes; to provide for effectiveness; and to provide for related
7 matters.
8 Be it enacted by the Legislature of Louisiana:
9 Section 1. R.S. 22:1346.1(introductory paragraph) and (2), 1346.2, 1346.3(A) and
10 (C), 1346.4, and 1346.5 (A)(1) and (4) and (B)(1) are hereby amended and reenacted to read
11 as follows:
12 §1346.1. Definitions
13 As used in this Section For the purpose of this Subpart, the following terms
14 have the following meanings definitions apply:
15 * * *
16 (2) "Stated value policy" means a residential insurance policy under which
17 the insured has the option to may declare a stated value for the insured residential
18 property, which is agreed upon by the insurer as the amount of insurance coverage,
19 irrespective of the current market replacement cost value of the property.
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1 §1346.2. Requirement to offer stated Stated value policy offer
2 A. Insurers offering residential property policies within this state may offer
3 a stated value policy option to homeowners upon the request of the homeowner or
4 his authorized agent, allowing for the insurance coverage to be based on a stated
5 value of the residential property as declared by the homeowner or authorized agent,
6 rather than solely on the market value of the property the replacement cost value of
7 the property.
8 B. Any insurer that offers a stated value policy option to homeowners as
9 provided in Subsection A of this Section shall prominently disclose stated value
10 policy offerings in all insurance policy proposals, agreements, and renewal
11 documents provided to consumers.
12 §1346.3. Homeowner requirements
13 A. A homeowner electing a stated value policy shall submit to his insurer a
14 written payoff statement from the each financial institution or any other entity
15 holding a mortgage or lien on the property. This statement shall accurately reflect
16 the outstanding balance or the nature of the mortgage or lien on the homeowner's
17 property at the time the homeowner applies for or renews an insurance policy. In
18 addition to the financial statement required in this Subsection, a homeowner shall
19 also provide to his insurer a mortgage certificate from the clerk of court indicating
20 the presence or absence of a mortgage on the property.
21 * * *
22 C. (1) Before issuing any policy that limits coverage on the residential
23 property equal to the unpaid principal balance of all mortgage loans on the stated
24 value policy, the insurer shall obtain a statement signed by insureds which contains
25 the following notice in boldfaced type no smaller than eighteen-point font:
26 "YOU ARE ELECTING TO PURCHASE COVERAGE AT A LIMIT THAT
27 IS EQUAL TO ONLY THE UNPAID PRINCIPAL BALANCE OF THE
28 MORTGAGE LOANS ON YOUR HOME LESS THAN REPLACEMENT COST.
29 ACCORDINGLY, IN THE EVENT OF THE TOTAL LOSS OF YOUR HOME OR
30 A LOSS FOR WHICH THE COST TO REPAIR YOUR HOME EXCEEDS THE
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1 UNPAID BALANCE ON YOUR MORTGAGE LOAN COVERAGE PROVIDED
2 BY THE POLICY, YOU WILL INCUR SIGNIFICANT FINANCIAL LOSSES,
3 INCLUDING THE POTENTIAL LOSS OF SOME OR ALL OF YOUR HOME'S
4 EQUITY."
5 (2) This Subsection shall not be construed to affect coverage under an
6 insurance policy or create a cause of action against the insurer or the insurer's agent
7 or representative.
8 * * *
9 § 1346.4. Minimum policy value
10 An insurer shall not issue a stated value policy for a sum less than the verified
11 outstanding balance of any all mortgage and liens on the homeowner's property,
12 ensuring that the insurance coverage adequately reflects the financial obligations
13 associated with the property.
14 .§1346.5. Dissemination of information on risks associated with stated value
15 policies; commissioner
16 A. To promote consumer awareness within the insurance marketplace, the
17 commissioner shall provide clear, understandable, and accessible informational
18 materials to consumers regarding the risks, potential disadvantages, and limitations
19 associated with stated value policies. At a minimum, the commissioner shall include
20 the following in informational materials:
21 (1) A clear explanation of what stated value policies are and how they differ
22 from other types of property insurance policies, including but not limited to
23 differences of replacement costs replacement cost policies.
24 * * *
25 (4) Consumer tips for evaluating insurance options and understanding policy
26 terms, including instructions on as to how the consumer may ask questions and seek
27 clarification from the insurer about the terms and conditions of a stated value policy.
28 B.(1) The commissioner shall establish a dedicated section on the
29 department's website for consumers to access the informational materials described
30 in this Section and shall distribute the informational materials to homeowners at least
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1 once every two years through either direct mail, email, or other means deemed
2 appropriate by the commissioner.
3 * * *
4 Section 2. This Act shall become effective upon signature by the governor or, if not
5 signed by the governor, upon expiration of the time for bills to become law without signature
6 by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If
7 vetoed by the governor and subsequently approved by the legislature, this Act shall become
8 effective on the day following such approval.
SPEAKER OF THE HOUSE OF REPRESENTATIVES
PRESIDENT OF THE SENATE
GOVERNOR OF THE STATE OF LOUISIANA
APPROVED:
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