What Damages Are Awarded in Bad Faith Claims?

Posted on October 4, 2022


Long Nguyen | author

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ICHQ | Site Author

You purchase homeowners or property insurance to protect your home and investments in the event they are damaged due to forces beyond your control. You expect your policy provider to be there for you and to deliver on promises made when disaster strikes.

As such, the State of Louisiana has strict rules in place that require insurance companies to process property insurance claims in good faith, and failure to do so can lead to serious consequences.

If you have a claim in which your homeowners or property insurance provider failed to address your claim in good faith, don’t wait to reach out for the professional legal counsel of an experienced New Orleans bad faith insurance attorney.

Insurance Companies and Bad Faith

Insurance companies are required to act in good faith in terms of the policies they sell. Without laws requiring the industry to uphold good faith practices, policyholders whose claims were denied or settled unfairly would have no recourse beyond going to court for the actual property damages incurred.

There are considerable legal penalties in place that are intended to dissuade insurance companies from stooping to bad practices and mishandling claims like yours. The good faith payment and adjustment of property damage claims in the State of Louisiana include all the following duties on the part of the insurance company:

  • Initiating the loss adjustment process in a timely manner, which generally means within 14 or 30 days
  • Promptly and accurately adjusting claims
  • Offering to settle insurance claims within 30 days of receiving satisfactory proof of loss
  • Paying claims in full within 30 days of receiving sufficient proof of loss
  • Paying all written settlements within 30 days
  • Providing accurate claim and insurance policy information

Consider the following bad faith practices:

  • When the insurance company misrepresents pertinent policy facts or provisions related to any of the coverage in question
  • When the insurance company fails to pay settlements within the required timeline after a settlement agreement has been reached and committed to writing
  • When the insurance company misleads claimants regarding when legal proceedings can be initiated
  • When the insurance company denies coverage or an adequate settlement based on an element of the policy that the insurer knows was altered without notifying the policyholder or gaining their consent
  • When the insurance company fails to adequately compensate a claim within 60 days of receiving the claimant’s satisfactory proof of loss – and the insurance company’s negligence in the matter is deemed random, unreasonable, or without probable cause

If the insurance company does not act in good faith in relation to your property damage claim, you may be entitled to bad faith damages. An important note to make here is that not every denied claim – or reduced claim – amounts to bad faith. If, for example, the provider covering your claim has a reasonable basis for its mistaken conclusion, bad faith does not apply.

Damages in Insurance Bad Faith Claims

If the insurance company handling your property claim fails to address your claim fairly and in accordance with the law, you are entitled to just compensation as addressed by the State of Louisiana’s bad faith litigation statutes.

The benefits outlined in your policy

You filed a property damage claim to address the covered property damage you’ve experienced, and the first order of business in a bad faith insurance claim is collecting on those policy benefits that you paid for in the first place.

Additional compensation

Depending upon the circumstances involved, a finding of bad faith handling of your claim can lead to additional compensation – paid as a penalty by the insurer – that is calculated at 50 percent to 200 percent of your overall damages.

Additionally, your attorney fees may be awarded, and in cases in which the lack of good faith is considered especially egregious, punitive damages that are intended to punish the insurance provider may apply.

Turn to an Experienced New Orleans Bad Faith Insurance Attorney for the Help You Need

If your property damage claim is denied or reduced unfairly, the skilled New Orleans bad faith insurance attorneys at Insurance Claim HQ have the experience and legal insight to skillfully advocate for a just resolution that affords you the bad faith damages to which you are entitled.

For more information, please consider contacting us today.


The content provided here is for informational purposes only and should not be construed as legal advice on any subject.