What Does Bad Faith Mean for a Homeowner Insurance Claim?
Bad faith refers to an insurance company’s failure to handle a claim fairly and promptly, as required under Louisiana law. This can include unreasonably denying a valid claim, failing to investigate properly, or simply delaying payment without a legitimate reason.
This standard exists because homeowners pay premiums for years expecting their insurer will actually honor the policy when a genuine loss occurs. When an insurer instead drags out the process, lowballs an offer, or manufactures excuses to avoid paying, Louisiana law gives homeowners a specific legal path to hold that conduct accountable.
What Law Actually Governs Bad Faith Claims in Louisiana?
Louisiana’s primary bad faith statute is La. R.S. § 22:1892, which was significantly restructured effective July 1, 2024. A Laplace homeowner insurance claim lawyer explains that the updated law consolidates duties that were previously spread across two separate statutes, establishing § 22:1892 as the single central authority governing how insurers must handle claims and what penalties apply when they fail to do so.
- Insurers generally must pay claims within 30 days of satisfactory proof of loss
- Failing to do so without justification can trigger financial penalties
- The 2024 restructuring consolidated most bad faith duties into one statute
- Penalties can include both a percentage penalty and attorney’s fees
What Penalties Can an Insurer Face for Bad Faith?
Under the current version of § 22:1892, an insurer that fails to timely pay a claim without probable cause can face a penalty of up to fifty percent of the amount owed, along with the insured’s reasonable attorney’s fees and costs. For immovable property claims specifically, penalties are generally capped at fifty percent of the damages sustained or five thousand dollars, whichever is greater.
These penalties exist on top of the underlying claim amount itself, meaning a successful bad faith claim can result in a homeowner recovering considerably more than what the insurer originally offered or delayed paying.
What Specific Conduct Counts as Bad Faith?
The statute identifies several categories of conduct that can trigger a bad faith penalty when knowingly committed, including misrepresenting policy provisions relevant to a claim, denying coverage based on an application the insurer knows was improperly altered, and misleading a claimant about the applicable filing deadline for their specific claim.
Does the 30-Day Payment Deadline Apply to Every Claim?
Generally, yes, once satisfactory proof of loss has been submitted, though the timeline and specific requirements can vary depending on whether the loss involves a catastrophic event such as a hurricane. The 2024 changes added specific provisions addressing catastrophic losses separately from more routine, non-catastrophic claims.
Can I Still Pursue a Bad Faith Claim if I Already Accepted a Settlement?
Generally, once a settlement has been accepted and payment has been made, pursuing a separate bad faith claim becomes considerably more difficult. This is one reason carefully evaluating an offer before accepting it, rather than after the fact, matters so much when a settlement seems inadequate.
What Should I Do if My Insurer Is Delaying My Claim?
Documenting every communication with your insurer, including dates, the names of representatives you spoke with, and copies of any correspondence, helps establish a clear timeline if a bad faith claim later becomes necessary. A Laplace homeowner insurance claim lawyer can confirm that keeping detailed records of your own proof of loss submission is particularly important, since the 30-day clock generally starts running from that point.
Photographs and video of the damage taken immediately after the loss, along with any repair estimates you obtain independently, further strengthen this record and give you a clear point of comparison against whatever the insurer ultimately offers.
How Do I Know if My Settlement Offer Is Actually Fair?
Comparing an insurer’s offer against independent repair estimates, contractor quotes, or your own documentation of the damage can reveal whether a settlement genuinely reflects the actual cost of repairs. An attorney reviewing an offer typically compares it against this kind of independent evidence before advising whether to accept it or push back for more.
Who Can Help if My Claim Was Handled Unfairly?
An attorney evaluates whether an insurer’s conduct actually meets the legal standard for bad faith under Louisiana’s current statute.
Who Handles These Claims for Laplace Homeowners?
Kiefer & Kiefer works to recover both the underlying claim value and any penalties Louisiana’s bad faith statute allows.
