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 Loss of Consortium in a Louisiana Personal Injury Case?

When an individual is severely injured, the injury not only affects that person, it also creates great financial and emotional stress for that person’s family. Income is drastically reduced or may even stop altogether. Childcare responsibilities fall on one parent’s shoulders. Household chores become one person’s obligation. In short, an injury can not only be catastrophic for the injured person, it also can also wreak havoc on their entire family. One unfortunate accident can effectively derail a family’s day to day life.

What are the elements of a Loss of Consortium claim brought by a spouse?

Typically courts will consider the following factors in a loss of consortium claim:

1. Loss of love, companionship, and affection;

2. Impairment of sexual relations between the parties;

3. Loss of financial support; and

4. Loss of aid and assistance.

   What is my Loss of Consortium Claim Worth?

   This is a fact specific question which will be unique for each case. Many questions will be asked of the spouses to determine the value of the loss of consortium claim. What activities did the married persons participate in prior to the accident? Were “date nights” a common event? What activities did the couple participate in together before and after the accident? Were the married persons sexually active prior to the accident? Were they sexually active after the accident?

   Clearly, the injuries and the marital relationship will need be thoroughly evaluated to determine how much the loss of consortium claim will be worth. Generally, the more stress and strain put on the non-injured spouse, the higher the loss of consortium claim will be in the case .

   If your spouse was injured, you should have a comprehensive and in-depth discussion with an experienced personal injury attorney to discuss the loss of consortium claim and what it is worth.