When roads are cleared of trees and debris and the disused power lines are removed, the inhabitants begin to return to an unrecognizable community, their homes, all the landmarks destroyed in the hard-hit areas. It's like a dream when they start navigating lost and shocked. Then there is: a remnant of what used to be a home, a business, a school, a shop, the town hall – all destroyed. But resolves with determination: “We have insurance. We're just rebuilding. “And it starts.
The insured informs the insurance company of his claim and asks: "What now and when can we expect to receive our insurance income?" Under the Louisiana Statute, insured persons have rights and can expect certain delays and services to be met by their insurers in adjusting their claims, as well as being treated fairly and honestly. Louisiana's statutes also regulate insurers' conduct and provide for penalties for failure to comply with those obligations and obligations.
After Hurricane Katrina, the state legislature in Louisiana adopted the policyholder, 1
(13) The policyholders have the right to receive payment of the amount of all claims for property damage, or part of the claim, the due date or a written offer to settle any damage to property within thirty days of receipt of satisfactory proof of loss in accordance with the provisions of RS 22: 1892 and 1973. If a claim is denied, the policyholders shall have the right to receive a written explanation of the reason for the total or partial denial of any claim made under their insurance policy.
(14) In relation to claims for damages from first parties, the policyholders shall have the right to request and receive from the insurance company all estimates, bids, plans, measurements, drawings, engineering reports, contractor reports, statements or documents that are not legally privileged which the insurance company prepared, had prepared or used during its adjustment of the policyholder's claim. A company can keep confidential adjustment remarks, logs and all documents drawn up in connection with fraud investigations.
(15) The policyholders shall have the right to lodge a complaint against all insurance companies producers or adjust with the Ministry of Insurance, and have the complaint investigated by the department.
(16) The policyholders shall have the right to a legible insurance to obtain a complete property insurance and request a duplicate or replace the policy as needed.
(17) The policyholders shall have the right to the measures prescribed in RS 22: 1892 if an insurance company violates that section in the handling of the claim.
Although Louisiana policyholders' declaration of rights does not itself provide for sanctions for violations of the listed rights, but they do refer to the Louisiana Statutes.
In Louisiana, an insurer has "an affirmative duty to adjust claims fairly and expeditiously and to make a reasonable effort to settle claims." 2 An insurer that violates these obligations shall be held liable for damages that have arisen as a result. Any of the following acts, intentionally committed or performed by an insurer, violate the insurer's obligations:
La. Pastor Stat. § 22: 1973 Obligation in good faith; claims procedures for claims; action sanctions
(1) Incorrect presentation of relevant facts or insurance provisions concerning any coverage in question.
(2) Failure to pay a settlement within thirty days of an agreement is reduced to written.
(3) Deny coverage or attempt to settle a claim on the basis of an application that the insurer knows has changed without notice or knowledge or consent of the insured.
(4) Misleading an applicant as to the applicable prescribing period.
(5) Fails to pay the amount of any damages that any insured person contracts within sixty days of receipt of satisfactory proof of loss from the applicant for such failure is arbitrary, capricious or without probable cause.
(6) Fails to pay claims according to RS 22: 1893 when such a failure is arbitrary, funny or without probable cause .
C. In In addition to any general or special damages to which a plaintiff is entitled for a breach of the imposed duty the plaintiff may be awarded penalties which are assessed against the insurer in an amount not exceeding twice damages incurred or five thousand dollars depending on which is largest. Such penalties, if granted, shall not be used by the insurer to calculate either past or potential loss experience for the purpose of setting interest rates or performing interest rate data. 3
Louisiana Statutes also provide time frames for which First Party Property Insurers shall proceed through adjustment of the policyholder's claim or be subject to the penalties set forth in La Rev. State. § 22: 1973. The following statute states the time frames that an insured can expect to trust or seek redress:
La. Pastor Stat. § 22: 1892. Payment and adjustment of receivables, … penalties; 1945
(1)… shall pay the amount of any insurance within thirty days of receipt of satisfactory proof of loss from the insured or any party to
(3) Except in the event of catastrophic losses, the insurer shall initiate loss adjustment of a damage to property … within fourteen days of reporting the loss plaintiff. In the event of a catastrophic loss, the insurer shall initiate a loss adjustment of a claim for damages within thirty days of reporting the damage, except that the Commissioner may issue a rule to extend the period for initiating a loss … Errors to comply with the provisions of this paragraph shall the insurer is subject to the penalties specified in RS 22: 1973.
(4) All insurers must submit a written offer to settle all damages to property damage, including claims from third parties, within thirty days of receipt of satisfactory proof of loss of this claim.
B. (1) Failure to make such payment within thirty days of receipt of such satisfactory written proof and require for this or failure to make a written offer to settle all claims for damages, including third party claims, within thirty days of receipt of satisfactory proof of loss of that claim, as set out in paragraphs A (1) and (4) of this section and failure to make such payment within thirty days of written agreement or settlement under paragraph (A); ) (2) in this section when such a failure proves to be arbitrary, capricious or without probable cause shall, in addition to the insurance premium, subject the insurer to a penalty t of the loss, of fifty percent damages of the amount due by the insurer to the insured, or one thousand dollars, whichever is the largest to be paid to the insured or to any of the said employees, or if a partial payment or a tender has been made, fifty percent of the difference between the amount paid or tender and the amount found overdue and reasonable legal fees and costs. Such penalties, if granted, shall not be used by the insurer to calculate either past or future loss experience for the purpose of setting interest rates or performing interest rate data. 4
Furthermore, Louisiana statutes alleviate the burden of establishing an exception under the insurer's policy and specifying behavior that is considered arbitrary and capricious, subject to the penalties described in La Rev. State. 1973:
La. Pastor Stat. §22: 1893. Claims relating to real estate
A. (1) No insurer may use the flood watermark on a covered structure without considering other evidence when determining whether or not a loss is covered under a homeowner's insurance policy.
(2) No insurer may use the fact that a home is removed or relocated from the founding without taking into account other evidence when determining whether loss is covered or not covered by a homeowner's insurance .
B. If damage to real property is wholly or partly covered by the insurance terms, the burden on the insurer is to exclude according to the terms of the insurance .
C. All clauses, terms, conditions or other provisions in insurance policy that change or attempt to change the burden on an insurance company as set out in subsection B of this section shall be invalid and without effect.
D. Any insurer determined to violate the provisions of this section shall be held liable under R.S. 22: 1973.
There is comfort in knowing that others have gone the way and left the lessons available to others. So much happens during recovery, which makes it important to document the claim and keep a diary of important events, such as phone calls to and from the insurer and adjuster, inspections and other communications. This will help you and your insurer to stay on track. We encourage policyholders affected by Hurricane Laura to be aware of their insurance rights and actions and hope to shed light on the process during these difficult times.
1 La. Reef. State. § 22:41. Policyholders' rights.
2 La Rev. State. § 22: 1973 Obligation in good faith; claims settlement practices; action penalty.
4 La. Reef. State. § 22: 1892. Payment and adjustment of claims, insurance other than life and health and accidents; claims for car damage; extension of the time to respond to claims during a disaster or disaster; penalties; burn-related shutdown.