BATON ROUGE, La. (AP) — A state judge Wednesday ruled as constitutional two new state laws giving insurance policyholders more time to sue their insurers or file claims over damage from hurricanes Katrina and Rita.

District Court Judge Kay Bates, who read her ruling from the bench, said the extension of the time periods doesn't expand citizens' rights under existing contracts but gives those who were displaced by the storms more time to enforce their rights.

At issue are laws that would extend the claims deadlines for Katrina and Rita victims by one year — until two years after the 2005 storms struck on Aug. 29 and Sept. 24. Lawmakers approved the new laws in the latest legislative session and required the state attorney general's office to immediately seek a judgment on whether the new laws were constitutional.

Ten of the state's major insurers were listed as defendants in the suit.

The laws apply to homeowners, personal property, tenant, condominium owners and commercial property insurance — and certain automobile, crop and livestock insurance policies. Bates said the laws don't apply to the National Flood Insurance Program, which is governed by federal law.

"If there ever was an occasion for the state to exercise its police and policy-making powers to protect its citizens, this is such a time," Bates read from her five-page ruling. "The destruction of these two Hurricanes was not limited to a small geographical area or a select group of people."

A lawyer for Allstate Insurance Co., the second largest homeowner insurer in Louisiana, argued the laws are unconstitutional because they would interfere with existing contracts with insurance company customers, who signed policies spelling out the one-year claims periods.

Philip Franco, the Allstate attorney, said changing those agreements would send a message to insurers and other businesses that Louisiana doesn't always honor its contracts, and he said that could jeopardize economic recovery in hurricane damaged areas.

"Who wants to do business in a region or state which subsequently changes agreements to their detriment?" Franco said.

He said many of the people who would get more time to file claims don't need the extension.

Megan Terrell, with the Attorney General's Office, argued the laws were needed to protect the public interest and ensure recovery in the hurricane-wracked region, where she said some people wouldn't have enough time to assess their damages and file claims if the extension wasn't granted.

Allstate had asked for the dispute to be heard in federal court, but a federal judge sent it to state district court instead.

To speed the ruling as the one-year anniversary of Katrina approaches next week, the Louisiana Supreme Court ordered Bates to listen to arguments and decide the case on Wednesday. Appeals of Bates' ruling will be sent directly to the high court, which plans to hold a hearing on the matter Friday.

The previous law gave Katrina victims through Aug. 29 and Rita victims through Sept. 24 to file lawsuits against their insurers, but since then, Louisiana Insurance Commissioner Jim Donelon said he has received assurances from nearly all the 385 companies writing homeowners insurance in Louisiana that they will give homeowners more time to settle their Katrina and Rita claims.

The lengths of time granted vary by company, however.

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By MELINDA DESLATTE
The Associated Press

Copyright 2006 Associated Press. All rights reserved.