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HB 825

INSURANCE: Provides relative to the Stated Value Homeowner's Policy Act

2026 Regular Session Introduced by Jacob Braud and 1 co-sponsor

HB 825 clarifies that stated value homeowner policies pay the policy amount tied to a declared value, not replacement cost, with mortgage-related proof and explicit risk notices.

Effective date: 05/22/2026.
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Bill Summary · HB 825

Summary: HB 825 (2026) – Stated Value Homeowner's Policy Act (Louisiana)

Purpose and intent

HB 825 amends and reenacts provisions of the Stated Value Homeowner's Policy Act. Its core purpose is to regulate and clarify how stated value homeowner’s policies work in Louisiana, defining key terms, outlining disclosure and documentation requirements, and establishing consumer information dissemination related to these policies. The bill shifts certain requirements and adds specific notice and mortgage-related provisions to protect homeowners and lenders.

Key provisions and changes

  • Definition of “Stated Value Policy” (R.S. 22:1346.1(2))

    • Redefines a stated value policy as a residential policy where the insured may declare a stated value for the home, agreed upon by the insurer as the insurance amount, regardless of the current market replacement cost of the property.

  • Right to offer stated value options (R.S. 22:1346.2)

    • Insurers may offer a stated value policy option upon request of the homeowner or their authorized agent.
    • Coverage is based on the declared stated value rather than the replacement cost value.

  • Disclosure requirements (removal of prior disclosure obligation) (R.S. 22:1346.2)

    • The bill removes the existing requirement that insurers must prominently disclose stated value policy offerings in all policy proposals, agreements, and renewal documents. The Legislature repeals that provision.

  • Homeowner documentation when electing stated value (R.S. 22:1346.3)

    • Homeowners electing a stated value policy must submit a written payoff statement from the mortgage holder or lienholder reflecting the outstanding balance.
    • In addition to the payoff statement, homeowners must provide a mortgage certificate from the clerk of court indicating the presence or absence of a mortgage.

  • Notice before issuing stated value coverage (R.S. 22:1346.3(C))

    • Before issuing a stated value policy, insurers must obtain a signed notice from the insured, in bold 18-point font, warning that coverage is equal to the unpaid mortgage balance (not replacement cost) and may result in significant financial losses and potential loss of home equity if a total loss occurs.
    • The notice explicitly states that coverage at the unpaid mortgage balance may leave recoveries short of repair costs.
    • The provision clarifies that this notice does not create a coverage obligation or a cause of action against the insurer or its agents.

  • Minimum policy value (R.S. 22:1346.4)

    • Insurers must not issue a stated value policy for an amount less than the verified outstanding balance of all mortgages and liens, ensuring coverage reflects financial obligations.

  • Dissemination of information and consumer awareness (R.S. 22:1346.5)

    • The commissioner must provide clear informational materials about stated value policies, including definitions, comparisons to replacement-cost policies, risk disclosures, and tips for evaluating options.
    • The commissioner must maintain a dedicated section on the Department of Insurance website and distribute materials to homeowners at least every two years via direct mail, email, or other approved methods.

Affected entities and impacts

  • Homeowners choosing to elect a stated value policy:

    • Must provide mortgage-related documentation (payoff statement and clerk’s mortgage certificate).
    • Will be confronted with explicit notice describing potential financial risk and equity loss in total-loss scenarios.

  • Mortgage lenders/lienholders:

    • Documentation requirements (payoff statements) are integrated into the policy election process.

  • Insurance companies:

    • May offer stated value options and must comply with notice requirements and minimum value standards.
    • Required to adjust communications and, previously, to provide consumer information (though the bill repeals the general dissemination obligation, see below).

  • Louisiana Department of Insurance:

    • Responsible for maintaining informational materials and a consumer-focused web page to help explain stated value policies.

Procedural and timeline aspects

  • The act becomes effective upon signature by the governor or, if not signed, upon lapse of time for gubernatorial action.
  • Amendments and redefinitions apply to the listed statutory sections (R.S. 22:1346.1, 1346.2, 1346.3, 1346.4, 1346.5).

Note: House amendments include technical edits, redefine “stated value policy,” remove mandatory disclosure language requirement, and clarify liens and replacement-cost context. The bill also repeals the duty to distribute informational materials to homeowners (part of current law).

Compiled from official sources — confirm details with the bill’s official record.

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