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Insurance Company’s Legal Duty to Timely Pay Hurricane Ida Claim-Attorney’s Fees and Penalties

In the aftermath of Hurricane Ida, Louisiana homeowners and businesses are continuing to process their insurance claims. After years of promptly paying insurance premiums, many insurance companies are breaking their PROMISE to timely pay insured damages and losses. As a result, policyholders are unable to immediately rebuild their homes and businesses.

Louisiana has specific laws designed to discourage and punish insurance companies and compensate the policyholder for not properly processing an insurance claim. The duty of “good faith and fair dealing” requires an insurance company to adjust Hurricane Ida claims fairly and promptly make reasonable efforts to timely settle claims with the policyholders. An insurance company is in “bad faith” when the insurer violates its duty to timely pay for losses and/or damages to the policyholder. In such case, the insurance company is liable to pay the policyholder monetary penalties and attorneys’ fees for its “bad faith.” Louisiana insurance law specifically requires an insurance company to comply with the following legal duties:

Promptly Adjust the Insurance Claim

Louisiana law requires a property insurance company to “initiate loss adjustment” within 30 days of notification of the claim. Specifically, an insurance company has to assign an adjuster to quickly inspect the loss. This duty exists because delays in the claims process can be devastating for policyholders who drastically need these funds. If you had to wait over 30 days for an adjuster to begin adjusting your loss, your insurance company may have violated this legal duty.

Misrepresenting Pertinent Facts or Insurance Policy Provisions

When adjusting a claim, an insurance company is prohibited from misrepresenting pertinent facts or insurance policy provisions including exclusions to the policy. This means that an insurance company shall not misrepresent to the policyholder that damages are payable due to wear and tear, a pre-existing event or damage caused by other causes aside from wind driven rain. Simply, an insurance adjuster cannot represent to a policyholder that damages are not recoverable when it is undisputed such line-item of damages are subject to reimbursement by said policy. 

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 statement of the amount owed to the policyholder. A proof of loss typically includes supporting documentation such as photos, videos, contractor repair estimates, invoices, receipts, contents lists, expert reports and other relevant information that substantiates your insurance claim. This requirement discourages insurance companies from ignoring and delaying payment of claims when a policyholder is teetering on the brink of financial ruin following a catastrophic hurricane. If you submit documentation to your insurance company proving entitlement to payment of damages and forced to wait over 30 days for payment, your insurance company may be in “bad faith”.

Improper Denial of a Claim

If an insurance company fails to fully pay a valid claim and such non-payment or partial payment was “arbitrary, capricious, or without probable cause,” then the insurance company may be in “bad faith.” This requirement discourages insurance companies from mistreating policyholders after a catastrophic event like Hurricane Ida. Such improper denial or deficient payments of a valid Hurricane Ida claim could force families and small businesses to experience financial ruin.

 If an insurance company violates the above legal duties, you may be entitled to collect penalties and attorney’s fees in addition to your unpaid damages. If you believe your Hurricane Ida insurance claim was denied, delayed or partially paid, you may be entitled an award of penalties and attorneys’ fees from the insurance company.