Everybody knows you need to have insurance. Not only is it often required by the law (such as with minimum liability coverage on your car or truck) or required by lenders (like with your mortgage), but nobody wants to be in a position where they are personally responsible for a claim.
For this reason, the vast majority of people have auto and homeowner’s insurance. To maintain this insurance, people have to pay tremendous amounts of money in insurance premiums. The expectation, of course, is that if you need to make a claim, your insurance company will take care of you.
However, this is not always the case. To keep insurance companies from taking advantage of their insureds or of those people who are making claims against their insureds, Louisiana had bad faith laws that protect people who are making claims from unfair practices by insurance companies.
1. What are the Louisiana Bad Faith Insurance Laws?
There are two bad faith insurance laws in Louisiana: (1) Louisiana Revised Statute 22:1892 and (b) Louisiana Revised Statute 22:1973.
2. What Do You Have to Prove to Make a Louisiana Bad Faith Insurance Claim?
Both of the Louisiana bad faith insurance statutes require you to prove the same elements to make your case:
a. You provided the insurer with satisfactory proof of loss that put them on notice of your claim and your damages;
b. They failed to pay you within the time periods set forth in the statute (30 days for 22:1892 and 60 days for 22:1973); and
c. Their failure to pay was arbitrary, capricious, or without probable cause.
3. What Damages Can you Get for an Insurance Bad Faith Claim in Louisiana?
The main difference between the two insurance bad faith statutes is the damages that you can recover. Under 22:1892, assuming you can prove the elements above, the insurer shall be subject to:
“[A] penalty, in addition to the amount of the loss, of fifty percent damages on the amount found to be due from the insurer to the insured, or one thousand dollars, whichever is greater, payable to the insured, or to any of said employees, or in the event a partial payment or tender has been made, fifty percent of the difference between the amount paid or tendered and the amount found to be due as well as reasonable attorney fees and costs.”
22:1973 provides for an even greater damage award:
“In addition to any general or special damages to which a claimant is entitled for breach of the imposed duty, the claimant may be awarded penalties assessed against the insurer in an amount not to exceed two times the damages sustained or five thousand dollars, whichever is greater.”
As you can see, these penalty statutes provide strong incentives for insurers to treat people fairly. But, this does not always happen.
Call a New Orleans Insurance Lawyer
If you are being mistreated by an insurance company, whether its your own or somebody else’s, The Mahone Firm is here to help. Call (504) 564-7342 to talk to a business litigation attorney about your case. There is no charge to speak with an insurance lawyer today.