What is the purpose of the Louisiana life and health insurance Guaranty Association?

The Louisiana Insurance Guaranty Association (LIGA) is a non-profit, private group of insurance companies based out of Baton Rouge. The association is there to help policyholders get benefits if insurance companies become insolvent. You can think of it as an insurance policy for insurance companies. 

The Purpose of LIGA

Occasionally, insurance companies are overwhelmed by claims and can end up bankrupt. This situation is more likely in the event of a natural disaster that affects thousands of their clients. The company doesn’t have enough money to pay all the outstanding claims at once, leaving some policyholders to lose out what they’re entitled to.

This was the case in Louisiana until 1970, when LIGA began operating. Before then, if your insurance company went under, you were in for a drawn-out battle for compensation. Claimants had to file a claim in liquidation proceedings. These claims could take years to finalize and not pay the claimant’s expected amount. 

LIGA helps Louisiana residents get the insurance money they need. 

Seven Things You Need to Know About LIGA

1. LIGA only deals with property and casualty claims. They cover homeowners, auto, and workers’ compensation insurance. A related organization called Louisiana Life & Health Insurance Association deals with other claims.
2. As a non-profit organization, LIGA pays only for “statutorily defined insurance claims.” In other words, they only work with cases where a person was legally required to have that insurance (according to state or federal law). If an insurance company isn’t a member of the association, the company must mention this in writing.
3. LIGA becomes involved in the liquidation proceedings, which can be a long and exhausting process.
4. The association assigns an adjuster to coordinate with the claimant on anything involved with coverage and payments.
5. LIGA settles when any of its members become insolvent and can’t meet their financial obligations.
6. As a non-profit unincorporated group, it isn’t a state agency. The state of Louisiana doesn’t give money to LIGA, and LIGA’s activities have nothing to do with the state. 
7. LIGA may sue or be sued. As a private entity, they alone are responsible for any of their liabilities.

FAQs About LIGA

Before LIGA started, many people suffered tremendous losses if an insurance company went into receivership and couldn’t fulfill its obligations. LIGA gives state residents peace of mind and specific compensation amounts if their insurance company goes under. 

Where do the Guaranty Funds Come From?

The funds are paid by the insurance companies that are members of LIGA. They pay up to 1% of their revenue annually.

How Much Money Can I Get?

The maximum payout is $500,000, and $10,000 on unearned premiums. All claims are subject to a deductible of $100. 

Do You Need a Lawyer to Get Help from LIGA?

You don’t have to have a lawyer, but it’s always a good idea. Most people won’t have the time or experience to deal with complicated court cases. A lawyer can save you a lot of trouble while you’re recovering from storm damage.

What Claims Are Covered By LIGA?

LIGA covers homeowners, auto, and workers’ compensation claims. If Hurricane Ida damaged your house, you may be able to make a claim.

• You can file a claim if you lost your roof or had other damage to your home.
• If your car washed away in the storm, you could file a claim.
• If you were injured while working on storm clean-up, you could file a claim. 

What Policies Are Not Covered By LIGA?

This can be a somewhat complicated question. To put it simply:

• LIGA only covers property and casualty policies and claims. Some examples of policies NOT covered by LIGA are life, health, and ocean marine insurance.
• You must have a special flood insurance policy. If you only have homeowners insurance, you won’t be covered in the event of a hurricane.

Support Through Hurricane Ida

Hurricanes are devastating, and Ida was one of the worst in U.S. history. Estimated damage costs are around 64 billion dollars. So far, at least two insurance companies have gone into receivership due to the enormous amount of claims presented to them. 

LIGA was able to get compensation for people who otherwise wouldn’t have received anything. 

Contact the Law Offices of Anidjar & Levine to Work With LIGA

In the aftermath of a natural disaster like Hurricane Ida, thousands of people must file insurance claims. An attorney from our firm can help you get the money you’re entitled to between losses and long-term effects from the storm.

The Law Offices of Anidjar & Levine have hurricane property claim lawyers experienced in working with LIGA. We have close ties to the Louisiana area and want to help people affected by hurricanes. We work on a contingency basis, so you pay nothing until your case is settled. Call today at 1-800-747-3733 for a free consultation. We’re available 24/7.