Bad faith insurance tactics are especially common during bad storm seasons, and Louisiana’s 2025 hurricane season may be one of the worst on record.
Heavy storms often trigger several hundred, or several thousand, insurance claims at once. Many insurance companies use these demand surges as an excuse to put claims on hold, delay the process, and hope desperate homeowners will accept any settlement offer.
Lack of compassion is at the core of all bad faith insurance tactics.
These companies simply do not care about customers, even though policyholders faithfully pay premiums month after month. A New Orleans insurance claim lawyer, on the other hand, feels compassion for bad faith insurance victims.
We put that compassion into action beginning the first moment you reach out to us. After we diligently build a case, we do not settle for anything less than the best possible results under the circumstances.
What is Insurance Bad Faith?
Bad faith is the opposite of good faith, or in this case, an implied covenant of good faith and fair dealing.
So, to understand what bad faith means, we should determine what good faith means. In a nutshell, when they act in good faith, insurance companies do four basic things:
- Immediately (or almost immediately) acknowledging a claim, opening a file, assigning a number, and dispatching an adjuster to the scene. This first step in the process may be the most common storm surge-related bad faith issue.
- Thoroughly investigating the claim, no matter how solid, or how weak, it appears at first blush. “Thoroughly” is a Legalese word that means different things in different contexts. But thoroughly never means a rubber-stamp approval or denial.
- The investigation should be transparent. When they work, adjusters can ask homeowners to stand back and give them some room, but they cannot ask homeowners to leave. Furthermore, policyholders usually have a right to examine all claim documents, including the adjuster’s report.
- Insurance companies must base their findings, and their settlement offers, on the facts that the investigation uncovers. Bad faith is common at this stage as well. If Bill needs a new roof, he needs a new roof, whether or not his neighbors received similar settlements.
A public adjuster’s report may be part of the equation as well. If a public adjuster’s report is significantly different from a private (insurance company) adjuster’s report, something may be rotten in the state of Denmark.
Common Bad Faith Tactics to Watch For
We laid out the general responsibilities that insurance companies have when policyholders file claims. In this section, we will look at some specific bad faith tactics to watch for, and offer some tips for homeowners.
Unjustified Claim Denials
A baseless claim denial may be the most obvious sign of insurance company bad faith. Some companies cite nonexistent exclusions, while others rely on ambiguous policy language. A baseless denial means the insurance company probably fell short in all four of the aforementioned areas.
What to Do:
First, demand a written explanation of the denial. Next, compare the denial with the policy’s language, and if the reasoning seems vague or inconsistent, consult a New Orleans insurance lawyer.
Delayed Investigations and/or Payment
Most people only file homeowners insurance claims if the damage is catastrophic and renders the home uninhabitable, sending the policyholder to a hotel room or the couch of a friend or relative. As mentioned, insurance companies know full well that time is on their side in these situations. They may take unfair advantage of the situation by delaying investigations or payment.
What to Do:
First and foremost, understand that no excuse for delay is a good excuse. The bad faith duty of care is too high. Specific unreasonable delay warning signs include:
- Multiple requests for the same document,
- More than a twenty-four hour response time lag, and
- Requests for “patience while we deal with such a large number of claims.”
Keep detailed records of every personal or electronic interaction, and document the response. Frequently, such tactics cause insurance companies to prioritize the matter (the squeaky wheel gets the grease). Obviously, if delays persist, a lawyer probably needs to get involved.
Unreasonably Low Settlement Offers
An insurance company sometimes finds a cheaper contractor like a magician pulls a rabbit out of a hat. Cut-rate contractors sometimes meet minimum requirements, but in most cases, you get what you pay for. Adjusters, who do not have to live in patched-up homes, frequently offer settlements based on artificially low repair estimates.
What to Do:
A public adjuster’s report is the best approach in these situations.
Misrepresenting Policy Terms
We often see this bad faith insurance tactic if the policyholder is an LEP (limited English proficiency) individual. Many words do not translate well from English into Spanish (or another foreign language). Legalese words almost never translate well.
Cross-reference misrepresentation is common as well. Assume wind blows the roof off Raul’s detached garage.
The adjuster claims the loss is not covered because the garage is separate from the house. But in another section of the policy, usually a definitions section at the beginning, which the adjuster conveniently overlooks, detached buildings listed in the policy (garages, tool sheds, etc.,) are included in the “insured property” definition.
What to Do:
Always request any claim-related statements in writing. Compare their interpretation with your copy of the policy, and don’t hesitate to seek legal advice if things don’t add up.
Refusing to Properly Investigate the Claim
The drive-by or cursory inspection may be the most common bad faith claim in this area.
Let’s go back to Raul’s roof and change the facts a bit. Assume the roof is damaged but remains largely intact. If the adjuster only looks at the outside of the roof, the adjuster doesn’t see water leaks and other signs of serious damage underneath the roof.
This problem is especially common if the adjuster is very experienced, as many adjusters immediately take an “I’ve seen this before and I know what I’m doing” approach.
What to Do:
Document everything you provided to support your claim. If the company does not respond or cherry-picks evidence, that’s a red flag.
Filing a Bad Faith Insurance Claim
A few final words about the nuts and bolts of bad faith insurance claims. In Louisiana, these claims have three basic elements:
- Timely presentation of a valid claim,
- Unreasonable response, and
- Resulting financial or emotional harm.
Victims of bad faith insurance practices are usually entitled to treble damages, especially if evidence indicates that the insurance company intentionally delayed the claims resolution process or otherwise intentionally caused harm.
Speak with our New Orleans Attorneys
Insurance companies take advantage of policyholders if they can. For a confidential consultation with an experienced bad faith insurance lawyer in New Orleans, contact Insurance Claim HQ. We routinely handle matters throughout the Bayou State.
