NEW LOUISIANA LAW ALLOWS STATED-VALUE HOMEOWNERS POLICIES
As of June 30, 2025, under Act 480 (HB 356), insurers in Louisiana are now permitted, but not required, to offer stated-value homeowners insurance policies. Provided that certain requirements are met, these types of policies would allow a homeowner to insure a residential property for a specified amount declared by the homeowner and agreed upon by the insurer.
The Act requires insurers to provide coverage on residential properties that is “not less than the total assessed fair market value of the property as shown on the most recent assessment of the parish in which the property is located.” Stated value policies are permitted for homeowners with or without a mortgage. If the property is not mortgaged, homeowners may choose the amount of coverage. If the property is subject to a mortgage, the stated value policy amount cannot be less than the total balance of outstanding mortgages.
Homeowners choosing a stated value policy must provide to the insurer a mortgage certificate from the parish clerk of court indicating whether the property is encumbered by a mortgage, along with a payoff statement from the mortgagee verifying the outstanding balance of the mortgage. Insureds with an outstanding mortgage will also be required to sign a mandatory disclosure acknowledging that the policy is limited to the unpaid mortgage balance, which may not fully cover a total loss and may result in significant financial losses.
There is no obligation for insurers to offer this type of coverage, but they may provide it upon the request of the homeowner. Insurers offering stated value policies must disclose the policy offerings in all insurance proposals, agreements, and renewals.
Proctor Loan Protector is reviewing the potential impact of the new law on business rules and will reach out to clients to discuss changes required to current processes.