What Happens When Your Insurance Company is Acting in Bad Faith?

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Insurance companies have a legal obligation to pay their insureds for covered losses.  This is the primary reason why people seek insurance coverage in the first place. Insurance companies should minimize risk and provide financial protection in the event of an accident or loss.  As most Louisiana citizens know after the catastrophe of Hurricane Katrina, some insurance companies don’t hold up their end of the bargain in the event of a loss.  In fact, some insurance companies will accept premium payments from their insureds and when it comes time to pay on a claim, they leave their insureds out to dry.

Fortunately for Louisiana citizens, there are two “bad faith” statutes which provide strict requirements for insurance companies in the event that there is a claim.  These statutes protect individuals from being taken advantage of by the big insurance companies. 

The first bad faith statute is La. R.S. 22:1973.  This statute provides that insurance companies owe to their insured “a duty of good faith and fair dealing.”  The insurance company also has a duty to adjust claims “fairly and promptly and to make a reasonable effort to settle claims with the insured or the claimant, or both. Any insurer who breaches these duties shall be liable for any damages sustained as a result of the breach.”

If this provision did not make it clear enough, La. R.S. 22:1973, provides a list of acts which, if committed willingly, by the insurance company may create a presumption of bad faith:

(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.

The second bad faith statute in Louisiana is 22:1892.  Fortunately for individuals making a claim in Louisiana, this statute imposes strict requirements on their insurance company.  Specifically, 22:1892 requires:

·         Payment within thirty days of written settlement agreement; or a

·         Written offer to settle property damage claim within thirty days of satisfactory proof of loss.

Failure to pay the claim in a timely manner expose the insurance companies to penalties “in addition to the amount of the loss, of fifty percent damages on the amount found to be due from the insurer to the insured, or one thousand dollars, whichever is greater, payable to the insured.”  In large claims against an insurance company, this amount can be steep. If you feel like your insurance company is acting in bad faith in a personal injury case, property damage case, or any other type of claim, contact an attorney to assist you with navigating through the claims process.  Most personal injury attorneys do not charge any fees up front which greatly benefits the client.  In fact, the attorney often gets paid only after resolution of the case or claim.

What is a "Fault Based" Divorce in Louisiana?

It’s a well known fact that divorcing spouses will often place blame on each other for the dissolution of the marriage. Beyond emotional fault, often times one of the spouses’ conduct will rise to the level of legal fault which may impact the divorce case.

Louisiana Civil Code art. 103 outlines the grounds for divorce in Louisiana. Particularly, art. 103 states that except in the case of a covenant marriage a divorce shall be granted upon proof that:

            (1) The other spouse has committed adultery.

Adultery is often the ultimate deal breaker in marriage. Emotional ties can be forever torn and trust is often irreversibly damaged when adultery occurs.

Adultery is generally considered sexual intercourse during marriage with someone other than one’s spouse. However, courts have expanded the definition of adultery to include oral sex. The concept of adultery is not set in stone and will depend on the particular set of circumstances. In addition, adultery must be proven by a preponderance of the evidence and the defendant will be presumed innocent.

One of the most difficult factors is that courts will most likely require corroborating evidence. This means a confession will often not be enough to obtain a judgment of divorce based on adultery. Additional evidence may be required such as a private investigator’s file or an additional witness.

(2) The other spouse has committed a felony and has been sentenced to death or imprisonment at hard labor.

A conviction of a felony and sentencing are sufficient grounds for divorce. It is not necessary that all delays for appeal have expired. It is also not necessary for the convicted spouse to have actually served the sentence.

 (3) During the marriage, the other spouse physically or sexually abused the spouse seeking divorce or a child of one of the spouses, regardless of whether the other spouse was prosecuted for the act of abuse.

This ground for divorce is a recent and much needed addition to fault based divorce in Louisiana. Victims of abuse were often required to wait out the time limits required for living separate and apart before they could obtain a divorce. This new addition frees the victim spouse from the their abusive spouse and further allows them to move on with their life in a more expeditious manner than before.

 (4) After a contradictory hearing or consent decree, a protective order or an injunction was issued during the marriage against the other spouse to protect the spouse seeking the divorce or a child of one of the spouses from abuse.

This ground for divorce is also new and very similar to (3). However, this additional ground for divorce will likely spare the victim spouse from having to undergo multiple trials on the issue of abuse. Trials can be extremely stressful and expensive. This ground for divorce will allow the victim spouse to present the signed protective order and obtain the judgment of divorce soon after. This hearing should be expeditious if the plaintiff has all of their evidence on hand.

If you are going through a divorce in Louisiana and need advice on exploring the option of a fault-based divorce, you should contact an experienced and perceptive attorney who is able to weigh your particular situation with you in an initial consultation. It is always very important that your particular set of circumstances is compared to the current laws and how they may or may not apply to your case.

When going through a stressful legal situation as a divorce, it is important to remember that there is a very good chance that someone who has had a very similar set of problems has been through this before, and that this is why the laws in Louisiana exist as they do. It is important to remember that yes, this is difficult, but with the right help, there is almost always a way through.