How Can Policyholders Prove Bad Faith in Insurance Disputes?
Louisiana policyholders buy coverage with the expectation that claims will be paid promptly and fairly. When an insurer drags its feet or refuses to honor clear policy language, the carrier may be acting in bad faith.
Under Louisiana insurance law, policyholders have powerful remedies when an insurer breaches the duty of good faith and fair dealing. At BFH Law Group in New Orleans, Louisiana, we guide clients through the statutory guidelines, evidentiary requirements, and courtroom strategies necessary to hold insurers accountable.
Understanding what counts as bad faith—and how to prove it—gives policyholders critical leverage during negotiations and in court.
Louisiana’s Bad Faith Statutes and Duties
Louisiana Revised Statutes §§ 22:1892 and 22:1973 set forth an insurer’s obligations. Section 22:1892 requires written settlement offers or payment within thirty days of receiving satisfactory proof of loss.
Section 22:1973 imposes broader duties, including the obligation to adjust claims fairly and to pay any settlement within sixty days. Violations can trigger penalty interest, attorneys’ fees, and, in certain cases, an additional fifty percent of the amount owed. These statutes are central to insurance law practice in Louisiana.
To establish bad faith under Louisiana insurance law, a policyholder must show:
Proof of loss was received by the insurer.
The insurer failed to pay or unreasonably delayed payment beyond statutory deadlines.
The failure was arbitrary, capricious, or without probable cause.
Courts examine the insurer’s conduct at the time of denial—not hindsight—to decide whether the carrier had a reasonable defense. If no legitimate dispute existed, the insurer’s refusal becomes actionable under Louisiana insurance law.
Common Bad Faith Practices by Insurers
Carriers employ various tactics that can rise to bad faith. A few patterns occur repeatedly in Louisiana insurance law disputes:
Ignoring key evidence—such as engineering reports or medical records—that supports the claim.
Making “lowball” offers far below documented damages.
Withholding policy provisions or misrepresenting coverage to discourage further pursuit.
Delaying adjuster inspections and then blaming the policyholder for incomplete documentation.
Requiring redundant forms or endless requests for records already supplied.
While insurers may investigate and even deny claims with a legitimate basis, Louisiana insurance law penalizes stalling that lacks factual support. The carrier’s file materials, email correspondence, and claim‑adjustment logs often reveal whether delays were justified or merely strategic.
Standard of Proof Under Louisiana Insurance Law
Bad faith claims proceed under a preponderance‑of‑the‑evidence standard. The policyholder bears the initial burden of showing the insurer received adequate proof of loss and still failed to pay within statutory timeframes.
Once that showing is made, the burden shifts; the insurer must present evidence of a reasonable defense. Without credible reasons—such as disputed coverage provisions or legitimate fraud concerns—the court will likely find the carrier’s conduct arbitrary.
In many cases, deposition testimony from adjusters and supervisors forms the heart of a bad faith case. Under Louisiana insurance law, carriers must keep internal claim notes, and those notes can document unwarranted delays or disregard of clear evaluations.
We often obtain these records through discovery and compare them against timeline requirements in §§ 22:1892 and 22:1973.
Evidence Policyholders Should Gather to Prove Bad Faith
A carefully documented personal injury claim places maximum pressure on the insurer. The following single list highlights items every claimant should maintain:
Date‑stamped photographs or videos of property damage or injuries.
The initial policy declarations and any endorsements clarifying coverage.
Copies of every letter, email, or text exchanged with the insurer, agent, or adjuster.
Proof‑of‑loss forms, medical bills, repair estimates, and receipts submitted to the carrier.
Delivery confirmations or certified‑mail receipts showing the insurer received required documents.
Independent expert reports (e.g., contractors, physicians, accountants) supporting damages.
Phone logs noting the date, time, and substance of each conversation with insurance representatives.
Insurer claim logs and internal guidelines obtained during discovery.
Statements from witnesses or contractors detailing carrier delays or misrepresentations.
Financial records demonstrating consequential losses caused by delayed payment.
Maintaining this evidence strengthens the credibility of the policyholder’s timeline and highlights statutory breaches under Louisiana insurance law.
Procedural Steps in Filing a Bad Faith Claim
Filing a bad faith claim entails the following process:
Submit written proof of loss: Louisiana insurance law requires providing satisfactory proof before penalties can accrue. Include detailed estimates, invoices, or medical records.
Document deadlines: Mark thirty and sixty days from the proof‑of‑loss date. If payment or a written offer doesn’t arrive, the carrier may be in statutory violation.
Send a demand letter: Although not required by statute, a demand letter referencing §§ 22:1892 and 22:1973 clarifies the policyholder’s position and invites settlement.
File suit in state or federal court: If the carrier doesn’t comply, litigation commences. Under Louisiana insurance law, venue often lies in the parish where the loss occurred or where the insurer is domiciled. Federal court is possible if diversity requirements are met.
Conduct discovery: Interrogatories, requests for production, and depositions expose internal claim practices. Many carriers settle after discovery reveals unjustified delays.
Seek penalties and fees: Courts can award penalty interest, attorney fees, and additional damages when statutes are violated. Proper pleadings must reference both §§ 22:1892 and 22:1973.
Your insurance law attorney can help you make sure each step of this process is completed correctly.
Damages and Penalties Available
Under § 22:1892, penalty interest accrues at the annual rate established by statute, calculated from the date the insurer’s payment became overdue. Section 22:1973 allows up to double damages or an additional fifty percent of the amount found due, whichever is greater, when the insurer’s breach is flagrant.
Courts also award attorney fees, turning the litigation cost burden back onto the carrier. Combined with compensatory damages for property loss or bodily harm, these penalties reinforce the consumer‑friendly stance of Louisiana insurance law.
Bad Faith in Health and Disability Policies
While property carriers attract most bad faith headlines, health and disability insurers also fall under § 22:1973. Delays in approving medical procedures, denying claims without proper investigation, or ceasing disability payments absent medical justification all breach Louisiana insurance law.
Documenting denial letters, appeal submissions, and peer‑review opinions will be critical in such cases.
How BFH Law Group Assists Policyholders
Our litigation approach starts with assessing coverage language and the timeline of carrier conduct. We interview witnesses, obtain expert evaluations, and gather every document noted earlier. Because Louisiana insurance law imposes strict deadlines on insurers, a well‑organized chronology often proves the case.
We pursue written discovery to secure the adjuster’s claim diary, supervisory approvals, and any third‑party evaluations that shaped the denial. These records reveal whether the carrier considered exculpatory evidence or simply ignored proof of loss.
When negotiations fail, we present timelines to the court showing statutory breaches, then quantify penalties. Our goal is full compensation for the original loss, plus every dollar Louisiana insurance law makes available for bad faith conduct.
Get What You Deserve
At BFH Law Group, we remain committed to enforcing fairness and recovering the penalties that discourage carrier misconduct. With offices in Louisiana and Texas, we’re proud to serve clients in Louisiana, Texas, and Florida. Call today to schedule a consultation.
