The proposed legislation, known as the "Stated Value Policy Act," aims to establish a framework for insurers of residential properties in Louisiana to offer stated value policies. This new policy option allows homeowners to declare a specific value for their property, which will be agreed upon by the insurer as the coverage amount, regardless of the property's current market value. Insurers are required to disclose the availability of stated value policies in all relevant documentation and must adhere to specific requirements when homeowners opt for such policies, including the submission of a written payoff statement and a mortgage certificate.

Additionally, the Act mandates that insurers provide coverage limits that reflect the total assessed fair market value of the property, with provisions for homeowners without mortgages to insure their properties for any stated amount. The commissioner of insurance is tasked with disseminating information about the risks associated with stated value policies, ensuring consumer awareness, and enforcing compliance with the new regulations. The Act also includes penalties for insurers who violate its provisions and establishes a severability clause to maintain the validity of the remaining sections if any part is deemed invalid.