Claims Handling Practices - Louisiana

Claims Adjusting Standards

Louisiana statutes prohibit the following unfair claims settlement practices (La. Rev. Stat. Ann. § 22:1964(14)(a)-(o)):

1. Misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue.


2. Failing to acknowledge and act reasonably promptly upon communications with respect to claims arising under insurance policies.


3. Failing to adopt and implement reasonable standards for the prompt investigation of claims arising under insurance policies.


4. Refusing to pay claims without conducting a reasonable investigation based upon all available information.


5. Failing to affirm or deny coverage of claims within a reasonable time after proof of loss statements have been completed.


6. Not attempting in good faith to effectuate prompt, fair, and equitable settlements of claims in which liability has become reasonably clear.


7. Compelling insureds to institute litigation to recover amounts due under an insurance policy by offering substantially less than the amounts ultimately recovered in actions brought by such insureds.


8. Attempting to settle a claim for less than the amount to which a reasonable man would have believed he was entitled by reference to written or printed advertising material accompanying or made part of an application.


9. Attempting to settle claims on the basis of an application which was altered without notice to, or knowledge or consent of, the insured.


10. Making claims payments to insureds or beneficiaries not accompanied by statement setting forth the coverage under which the payments are being made.


11. Making known to insureds or claimants a policy of appealing from arbitration awards in favor of insureds or claimants for the purpose of compelling them to accept settlements or compromises less than the amount awarded in arbitration.


12. Delaying the investigation or payment of claims by requiring an insured, claimant, or the physician of either to submit a preliminary claim report and then requiring the subsequent submission of formal proof of loss forms, both of which submissions contain substantially the same information.


13. Failing to promptly settle claims, where liability has become reasonably clear, under one portion of the insurance policy coverage in order to influence settlements under other portions of the insurance policy coverage.


14. Failing to promptly provide a reasonable explanation of the basis in the insurance policy in relation to the facts or applicable law for denial of a claim or for the offer of a compromise settlement.


15. Failing to provide forms necessary to present claims within fifteen calendar days of a request with reasonable explanations regarding their use, if the insurer maintains the forms for that purpose.

Hurricane Harvey Claims Standards

The Louisiana Department of Insurance issued a guideline in advance of Hurricane Harvey:  https://www.ldi.la.gov/docs/default-source/documents/consumer-updates/ldi-harvey-prep.pdf?sfvrsn=6.

Duty of Good Faith

Louisiana has a private cause of action for first and third-party claimants alleging bad faith insurance practices. Any of the following acts, if knowingly committed or performed by an insurer, constitutes a breach of the insurer’s duty of good faith and fair dealing (La. Rev. Stat. Ann. § 22.1973(B)(1)-(6)):

1. Misrepresenting pertinent facts or insurance policy provisions relating to any coverages at issue.


2. Failing to pay a settlement within thirty days after an agreement is reduced to writing.


3. Denying coverage or attempting to settle a claim on the basis of an application which the insurer knows was altered without notice to, or knowledge or consent of, the insured.


4. Misleading a claimant as to the applicable prescriptive period.


5. Failing to pay the amount of any claim due any person insured by the contract within sixty days after receipt of satisfactory proof of loss from the claimant when such failure is arbitrary, capricious, or without probable cause.


6. Failing to pay claims pursuant to R.S. 22:1893 when such failure is arbitrary, capricious, or without probable cause.

A claimant may be entitled to double damages in addition to any general or special damages awarded. La. Rev. Stat. Ann. § 22:1973(C).

A finding of contractual liability is a necessary predicate to a bad faith claim under La. Rev. Stat. Ann. § 22:1973. Wagner v. Tammany Holding Co., LLC, 135 So. 3d 77, 87 (La. Ct. App. 2013).  

Public Adjusters

Public adjusters are governed by standards of conduct codified at La. Rev. Stat. Ann. §§ 22:1691-1708 (2009).

Communication, Investigation, and Payment Deadlines

See La. Rev. Stat. Ann. §§ 22:1964, 1973 (2014).

Promptly acknowledge and act upon communications with respect to claims.

Affirm or deny coverage of claims within a reasonable time after proof of loss statements have been completed.

Promptly provide a reasonable explanation of the basis in the insurance policy in relation to the facts or applicable law for denial of a claim or for the offer of a compromise settlement.

Provide forms necessary to present claims with reasonable explanations regarding their use if forms are maintained for that purpose within 15 calendar days of a request.

Pay a settlement within 30 days after an agreement is reduced to writing.

Pay the amount of any claim due any person insured by the contract within 60 days after receipt of satisfactory proof of loss statements from claimant.

Provide loss information for the 3 previous policy years to the first named insured within 30 days of receipt of a written request from the first named insured.