What Constitutes a Bad Faith Insurance Claim?

Louisiana has two bad faith insurance laws, and they both define bad faith as occurring when an insurer acts in a manner that is “arbitrary, capricious, or without probable cause.”  In other words, if the denial, settlement offer, or delay is unjustified or unreasonable, the company is acting in bad faith.  Acting in bad faith allows your insurance to reduce or eliminate the amount it will ultimately pay on your claim.

What Do Arbitrary and Capricious Mean in this Context?

Essentially, anything that is arbitrary and capricious was done by impulse and not by reason.  Louisiana law also prohibits “vexatious” conduct or conduct that is only intended to annoy or harass.  According to the Louisiana Supreme Court, vexatious conduct is “unjustified, without reasonable or probable cause or excuse.  If your insurance company is not treating your claim with the respect and professionalism it deserves, you may be experiencing bad faith handling of your claim.

Is the Bad Faith Conduct Intentional

Generally, according to the Louisiana Supreme Court, bad faith conduct is based on the insurer’s “willful refusal of a claim” that isn’t denied on a reasonable basis.

Was There An Unreasonable Delay?

Insurance claims are expected to be handled promptly, generally within 30 to 60 days, depending on the nature of the claim.  Unreasonable or arbitrary delays will constitute a bad faith handling of your claim.

Is Your Insurer Asking for Too Much?

Photos, papers, lists, forms, all of these will be part of your submission.  However, if your insurer keeps coming back for more documents, and those documents seem less and less related to your claim, the company may be acting in bad faith.

Consult a Louisiana Bad Faith Insurance Claim Attorney Today!

If you think your insurance company is acting in bad faith, you should contact an experienced and knowledgeable bad faith insurance claim lawyer as soon as possible for a free initial consultation. Delay could make your recovery impossible! Insurance claims – and lawsuits arising out of them – have a short statute of limitations in Louisiana.

[LEARN MORE]:

• How to Prove Bad Faith in a Homeowner’s Insurance Claim
• What to Do When Your Insurance Company Fails to Investigate

FAQs

1. Where does the duty of good faith come from?

Under US law, including that of Louisiana, all parties to a contract have a responsibility to perform their duties with good faith. It is inherent in every contract.

2. Why does a company want to slow down the payment process?

If they go slowly, financial pressure on you will mount, and you will likely accept a lower settlement amount.

3. What do I do if I think I have a bad faith claim?

You can contact a knowledgeable attorney and file a consumer complaint with the Louisiana Department of Insurance.