The Two Major Laws Governing Insurance Bad Faith In Louisiana

Posted on April 16, 2020


Hayden Haskins | author

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ICHQ | Site Author

Anytime you pay for insurance, whether car insurance, health insurance, or homeowners insurance, you expect the insurance carrier to pay for legitimate claims made under the policy. However, there are times when insurance companies act in bad faith. Our New Orleans attorneys want to discuss two Louisiana bad faith insurance laws that work to prevent insurance companies from mistreating policyholders.

Good Faith and Fair Dealing

In Louisiana, insurance companies are legally required to act in good faith and fair dealing when it comes to investigating, adjusting, and settling claims (Louisiana Revised Statute § 22: 1973). This law against bad faith insurance practices requires that insurers adjust claims in a timely and efficient manner and make a reasonable effort to settle every claim. Insurers may not:

  • misrepresent relevant facts or insurance policy provisions. 
  • fail to pay a settlement within the 30-date timeline after an agreement is reached.
  • mislead a claimant has to win legal proceedings may be initiated.
  • deny coverage or attempt to settle a claim on a basis that the insurer knows was altered without notice to or knowledge of the insured.
  • fail to pay a claim amount due to any person insured by the contract within 60 days after satisfactory proof of loss from the insured when such a failure to pay is arbitrary, capricious, or without probable cause.
  • fail to pay a claim pursuant to R.S. 22:1893 concerning immovable property when such a failure is arbitrary, capricious, or without probable cause.

Payment and Adjustment of Claims

Under Louisiana’s bad faith insurance laws, insurance carriers also have an obligation to adjust and pay claims fairly and promptly after a policyholder has filed a claim (La. Rev. Stat. § 22:1892). This process begins when a policyholder provides satisfactory proof of their loss and provides an estimate of the damages recoverable under their original policy. 

When the insurance carrier receives the proof of loss, they are required by law to begin adjusting the claim within 14 days (or 30 days in the event of a catastrophic loss). The insurance carrier is then required to settle any property damage claim within 30 days of receiving satisfactory proof of loss. However, this can be extended for an additional 30 days in the event a federal or state disaster or emergency is declared. 

Let Our Team Help You With Bad Faith Insurance Claims

If you or somebody you care about has been mistreated by an insurance carrier, contact an attorney as soon as possible. At Insurance Claim HQ, our knowledgeable team in bad faith insurance practices will investigate your claim and work to secure any compensation you are entitled to. We believe everybody is entitled to fair treatment by their insurance carrier. Contact our New Orleans bad faith insurance attorney for a free consultation of your case.