In the aftermath of Hurricane Ida, thousands of Louisiana residents and businesses are making property insurance claims. For years premiums were faithfully paid to insurance companies in exchange for a promise. A promise that when disaster struck, insurance claims would be paid fairly so that homes and businesses could be rebuilt without delay.
Because Louisiana is particularly vulnerable to natural disasters like hurricanes, it is very important that property insurance companies honor their promises to policyholders. Louisiana has laws designed to discourage bad behavior by insurance companies and compensate the victims of such behavior. If an insurance company is found to have violated such Louisiana laws, it is said to be in “bad faith.” If an insurer is determined to be in “bad faith,” it can be forced to pay financial penalties and attorneys’ fees to the policyholder it wronged.
The Duty Of “Good Faith And Fair Dealing” Under Louisiana Law
Under Louisiana law, insurance companies owe their policyholders the duty of “good faith and fair dealing” in handling claims such as those made after Hurricane Ida. This means that an insurance company has an affirmative duty to adjust Hurricane Ida claims fairly and promptly and to make reasonable efforts to settle such claims with their policyholders.
But what does that really mean within the context of a Hurricane Ida insurance claim? Louisiana law specifically sets forth certain things an insurance company must do and not do during the claims process to fulfill this duty of good faith and fair dealing. Here are a few of these requirements:
1. Begin The Adjustment Of The Claim Promptly – Louisiana law requires a property insurance company to “initiate loss adjustment” within 30 days of being notified of the claim in cases of catastrophic losses resulting from major hurricanes.
This means that your insurance company has to get to work promptly. It has to assign an adjuster to your claim and get that adjuster out to your property quickly to inspect your loss. This duty exists because delays in the insurance claims process can be devastating for policyholders who drastically need these funds. Such delays can lead to financial hardship and even bankruptcy or homelessness in the most extreme cases.
If you made a claim with your insurance company and were forced to wait over 30 days for an adjuster to come out and begin adjusting your loss, your insurance company may have violated this law. You may be entitled to collect penalties and attorneys’ fees from your insurance company, in addition to what the insurance company owes for your damaged property.
2. Misrepresenting Pertinent Facts Or Insurance Policy Provisions – When adjusting a claim, an insurance company is forbidden from misrepresenting pertinent facts or insurance policy provisions.
This means that an insurance company cannot falsely claim that your loss was solely caused by an excluded event (like flooding) if it was also caused by a covered event such as wind damage. Likewise, it means that an insurance adjuster cannot tell you that certain things are not covered under your policy when in fact, they actually are covered.
If your insurance company misrepresented certain facts or policy provisions to you, then you may be entitled to collect penalties and attorneys’ fees from your insurance company, in addition to what the insurance company owes for your damaged property.
3. Pay Claims Within 30 Days After Receiving “Satisfactory Proof Of Loss” – Louisiana law requires insurance companies to pay claims timely. If an insurance company does not pay a claim within 30 days after receiving “satisfactory proof of loss,” then the insurance company may be in “bad faith.”
“Satisfactory proof of loss” is a detailed accounting of the amount you are owed under the applicable insurance policy. A proof of loss typically includes supporting documentation in the form of photos, videos, contractor repair estimates, invoices, receipts, personal property lists, expert reports and other relevant information that substantiates your entitlement to the claimed funds under the policy.
Again, this duty exists to discourage insurance companies from dragging out claims when policyholders are teetering on the brink of financial ruin following a catastrophic hurricane. In the aftermath of a storm, financial savings can quickly be depleted paying for evacuation expenses and costs associated with renting additional housing while a hurricane-damaged home or business is repaired.
If you submitted documentation to your insurance company proving that you are entitled to certain funds under the policy and were forced to wait over 30 days to be paid what was owed, your insurance company may be in “bad faith.” You may be entitled to collect penalties and attorneys’ fees from your insurance company, in addition to what the insurance company owes you for your damaged property.
4. Denying A Claim For No Good Reason – If an insurance company fails to pay a valid claim and it is determined that the failure to pay was “arbitrary, capricious, or without probable cause,” then the insurance company may be in “bad faith.”
This duty exists to discourage insurance companies from mistreating vulnerable policyholders after a catastrophic hurricane. The denial of a valid Hurricane Ida claim could force families and small businesses in devastated areas to the brink.
If you believe your insurance claim was denied without good reason, you may be entitled to penalties and attorneys’ fees from the insurance company.
For more information about how we can help you with your Hurricane Ida insurance claim, contact us online or call us toll-free at 844-943-7626.
Jed Cain is a partner with Herman, Herman & Katz, LLC. He has dedicated his career to representing injured folks and their families.