As a homeowner in Louisiana, dealing with property damage can be stressful, but that stress intensifies when your insurance company isn’t acting in good faith. Unfortunately, bad faith insurance practices happen more often than they should, and knowing how to recognize them is crucial for protecting your rights and ensuring you receive the compensation you’re entitled to.
In this blog, we’ll explore common examples of bad faith insurance practices in Louisiana and what to do if you suspect your insurance company is treating you unfairly.
Louisiana’s Bad Faith Insurance Law
In Louisiana, bad faith law is governed by La. R.S. § 22:1892 and La. R.S. § 22:1973. If your insurance company fails to meet its obligations in a fair and reasonable manner, it may be acting in bad faith. This includes:
- Failing to settle a claim when it is clear they should have had they acted fairly and honestly with your interests in mind.
- Not conducting a reasonable investigation into your claim based on all available information.
- Unreasonably refusing to settle a claim even when it’s obvious that the claim should be paid.
Insurance companies in Louisiana are expected to treat policyholders fairly (and vice versa), and violations of these duties can lead to bad faith claims. While the state allows for penalties, proving bad faith requires understanding the law and knowing the right steps to take.
Changes to Louisiana Bad Faith Laws
Earlier this year, Louisiana Governor Jeff Landry signed a series of insurance bills into law. In addition to repealing the state’s “three-year rule,”, newly signed Act No. 3 (formerly Senate Bill 323) introduces significant changes to how bad faith claims and insurance disputes are handled in Louisiana. For more about those changes, be sure to read this post.
Common Signs of Bad Faith Insurance Practices
Recognizing the warning signs of bad faith practices can help you avoid unfair treatment. Here are the key red flags to watch for:
- Unjustified claim denial– If your insurance company denies your claim without a valid reason or provides a vague explanation, this could be a sign of bad faith. Louisiana law requires insurers to give specific reasons for denials, and if their explanation seems unjustified, it may warrant further investigation.
- Excessive delays – Some delay is common in the claims process, but excessive or unexplained delays can indicate bad faith. Insurers must act within specific timeframes to process claims, especially in the wake of catastrophic events like hurricanes.
- Poor communication – Struggling to get in touch with your insurance adjuster or getting no updates on your claim status can be another indicator of bad faith. Insurance companies are required to maintain open communication with policyholders and keep them informed.
- Lowball settlement offers – Offering a settlement far below what your damages are worth is a common tactic in bad faith practices. The insurer may pressure you to accept a low offer, emphasizing delays or threatening to deny the claim entirely if you don’t settle quickly.
- Misrepresentation of policy terms – Sometimes, an insurance company will misinterpret or even misrepresent your policy to avoid paying. This might involve stating that certain damages aren’t covered when they are, or enforcing exclusions that were not made clear when you purchased the policy.
- Unreasonable documentation requests – While insurance companies need documentation to process your claim, repeated or unreasonable requests for additional information can be a stalling tactic.
- Failure to investigate thoroughly – Insurers are required to conduct a proper investigation to assess your claim. A quick decision without reviewing the full facts, sending an unqualified adjuster, or dismissing evidence could be signs that your insurer is acting in bad faith.
What to Do If You Suspect Bad Faith in Louisiana
If you believe your insurance company is acting in bad faith, it’s important to take action. Start by documenting all communication with your insurer, including emails, phone calls, and any correspondence. Keep copies of all documents related to your claim, including receipts, photos, and estimates for repairs. This evidence can be crucial if you decide to pursue legal action.
You should also consider consulting with a Louisiana insurance attorney who specializes in bad faith claims. An experienced lawyer can help you navigate the complexities of insurance law, gather evidence, and build a strong case. If the insurer is found to be acting in bad faith, you may be entitled to penalties and compensation beyond the original claim amount.
Consult an Insurance Law Attorney for Help
Proving bad faith can prove challenging, and it requires a thorough understanding of insurance law, evidence gathering, and legal procedures. Our team at Kandell, Kandell & Petrie Law Firm can assess your case, advise you on the best course of action, and represent you in negotiations or court proceedings.
Contact our team today to speak to one of our claims advisors in New Orleans to discuss your needs and get started on the road to receiving the financial relief you deserve for your insurance claim in Louisiana.
