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‘Safety net’ organization failing to protect hurricane victims whose insurance company has gone under

LAKE CHARLES, La. (KPLC) – A lawsuit filed in Calcasieu claims the Louisiana Insurance Guaranty Association is failing to protect Hurricane Laura and Delta victims whose insurance companies became insolvent.

LIGA’s website says it was created by the legislature in 1970 as a “safety net for insurance consumers if their insurer becomes insolvent.” The non-profit organization “steps in to pay certain statutorily defined claims.”

“The payment of claims by LIGA has been a continuing source of reliability and relief to thousands of families and companies whose loss would have otherwise gone unpaid.”

The lawsuit, though, claims LIGA is not meeting its legally required obligations.

The Lake Charles home of the lead plaintiff, Judith Mudd, was damaged by wind and wind-driven rain in both Laura and Delta, according to the lawsuit. It was insured by Lighthouse Excalibur Insurance Company, which became insolvent in May of 2022.

Mudd’s unpaid claims are “covered claims” that now should be paid by LIGA, the lawsuit reads.

“LIGA has not only failed to promptly pay the covered claims of Plaintiff as required by statute, but has breached its statutory obligations to hundreds, if not thousands, of Louisiana policy holders whose insurers have been declared insolvent by failing to promptly pay those covered claims involving Hurricanes Laura and Delta as well.”

The lawsuit does not list the amount of Mudd’s claims nor how much she is seeking.

The lawsuit was filed Wednesday by Tom Filo, Michael Cox, and Somer Brown, of Cox, Cox, Filo, Camel, Wilson.

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