Louisiana Insurance Bad Faith: When Your Insurer Won’t Pay on Time
Louisiana law sets deadlines for insurers to adjust and pay claims. When an insurer misses them without a good reason (“arbitrary, capricious, or without probable cause”), it can owe penalties and your attorney fees on top of the claim.
The deadlines today
| Ordinary loss | Catastrophic loss (declared emergency or disaster) | |
|---|---|---|
| Insurer must start adjusting | 14 days after notice | 30 days after notice; the Commissioner can extend it up to 30 more days |
| Insurer must pay | 30 days after satisfactory proof of loss | 60 days for a home; 90 days for other buildings |
| Penalty if nonpayment is arbitrary or capricious | 50% of the amount found due (or of the underpayment) plus proven economic damages, or $1,000, whichever is greater, plus attorney fees and costs | 50% of the amount found due (or of the underpayment) plus proven economic damages, or $2,500, whichever is greater, plus attorney fees and costs |
| Statute | La. R.S. 22:1892 | La. R.S. 22:1892.2 |
Penalties are not automatic. A court must find the insurer’s failure to pay was arbitrary, capricious or without probable cause.
What changed in 2024 and 2025
- La. R.S. 22:1973 was repealed effective July 1, 2024. It allowed penalties up to twice the damages caused by the insurer’s breach, or $5,000. Claims that arose before the repeal are generally still governed by the old law.
- Pre-suit notice. Before suing for penalties under the catastrophe statute, you must give the insurer 60 days’ written notice of what is owed. If it pays the amount demanded, plus the expenses and capped attorney fees claimed, there is no further penalty claim on that demand. A suit filed too early is put on hold.
- You owe good faith too. The law now places a duty of good faith on the policyholder, and misconduct can be weighed in deciding penalties and fees.
- Proof-of-loss forms. Since August 1, 2025 (Act 500 of 2025), an insurer may require its own state-approved proof-of-loss statement. It must give you the form within 10 business days of your claim. If it requires one, the completed form is the only proof of loss that starts its payment deadline.
- Contractor checks. Since August 1, 2026 (Act 932 of 2026), when a contractor is named on a repair check, the insurer must verify the contractor’s license. A delay caused by being unable to verify the license may not be penalized.
These changes make the paperwork matter more than ever. A missed notice or an incomplete form can cost you the penalties.
What counts as “satisfactory proof of loss”
The payment clock starts when the insurer has enough information to know what it owes on a covered loss. The Louisiana Supreme Court has held that information from the insurer’s own adjuster and experts can be enough (Louisiana Bag Co. v. Audubon Indemnity Co., 999 So. 2d 1104 (La. 2008)). A contractor’s estimate with photos can be enough too, but not always. If the insurer validly requires its own proof-of-loss form (allowed since August 1, 2025), returning that completed form is what starts the clock.
Even “self-insured” programs can owe penalties
After Katrina, a rental-car company’s fleet was covered through a group “self-insured” program. The program argued it wasn’t an insurer, so the bad-faith statutes couldn’t apply. In Express Rent-A-Car v. U-Save (E.D. La. 2009), I persuaded the federal court that a group self-insurance pool is insurance, and that the administrator was an “insurer” subject to the bad-faith statutes. The court later held it was an unauthorized insurer and required it to post a bond before it could keep defending (La. R.S. 22:1909).
Past results do not guarantee a similar outcome.
Insurer stalling or lowballing? 504-834-4000. Back to Louisiana Hurricane Insurance Claims