Louisiana bad faith insurance law is now housed in a single statute, R.S. 22:1892, after the legislature repealed R.S. 22:1973 effective July 1, 2024, and consolidated both frameworks into one.1Louisiana State Legislature. Louisiana Revised Statute 22:1973 The current law sets payment deadlines, imposes a duty of good faith on insurers, lists conduct that breaches that duty, and provides penalties, attorney fees, and proven economic damages when insurers act arbitrarily, capriciously, or without probable cause. One thing the new law took away: general damages for mental anguish are no longer recoverable.
What Your Insurer Owes You
R.S. 22:1892(I) says every insurer, including surplus line carriers, owes its insured a duty of good faith and fair dealing. That duty is affirmative. The insurer has to adjust claims fairly, move promptly, and make a reasonable effort to settle. The duty extends to anyone acting on the insurer’s behalf, whether an in-house adjuster, an independent adjusting firm, or a third-party administrator. You cannot sue the individual representative separately, but the insurance company itself is on the hook for whatever any of them do wrong.2Louisiana State Legislature. Louisiana Code RS 22:1892 – Payment and Adjustment of Claims
The good faith duty runs primarily from the insurer to its own insured. Third-party claimants have more limited standing, though the penalty provisions in subsection B do cover third-party property damage claims, so someone whose vehicle damage the other driver’s insurer won’t pay may still have recourse under that specific provision.
The Deadlines That Start the Clock
R.S. 22:1892(A) sets several calendar-day deadlines that begin running once the insurer has what it needs:
- Payment is due within 30 days after the insurer receives satisfactory proof of loss.
- A written offer to settle a property damage claim is due within 30 days after satisfactory proof of loss.
- Loss adjustment on a property damage claim must begin within 14 days of notice, or 30 days for catastrophic losses (the insurance commissioner can extend these during declared emergencies).
- The insurer must send the field adjuster’s report to the insured within 15 days of completing the inspection.
- A written settlement, once signed, must be paid within 30 days.
These are calendar days. Weekends and holidays count. If you provide requested documentation on March 1, the 30-day window closes March 31. The former 60-day deadline that lived in the repealed R.S. 22:1973 is gone; all timelines now run on 30-day clocks.2Louisiana State Legislature. Louisiana Code RS 22:1892 – Payment and Adjustment of Claims
The Reciprocal Duty on You
The 2024 reform added subsection J, which places a good faith duty on policyholders and claimants too. If you knowingly violate that duty by refusing to cooperate with the insurer’s investigation or ignoring the policy’s requirements, the insurer gets a defense it did not have before. Cooperation is not just good practice now; it’s a legal obligation that can defeat your bad faith claim.2Louisiana State Legislature. Louisiana Code RS 22:1892 – Payment and Adjustment of Claims
What Counts as Bad Faith
R.S. 22:1892(I)(2) lists specific acts that, if the insurer or its representative commits them knowingly, breach the good faith duty:
- Misrepresenting policy provisions or facts relevant to the coverage at issue.
- Failing to pay a written settlement within 30 days of the agreement.
- Denying a claim or forcing a settlement based on an application the insurer knows was altered without the policyholder’s knowledge.
- Misrepresenting the prescriptive period to a claimant, a tactic that can trick someone into losing the right to sue.
- Failing to pay when the failure is arbitrary, capricious, or without probable cause under R.S. 22:1893.
The operative word is “knowingly.” A miscalculated payout or a genuine coverage dispute is not bad faith. Louisiana courts have consistently held that an insurer with legitimate doubts about coverage has the right to litigate without being penalized. What the statute punishes is knowing wrongdoing or reckless indifference to whether the conduct is wrong.2Louisiana State Legislature. Louisiana Code RS 22:1892 – Payment and Adjustment of Claims
What You Can Recover
The statute runs two parallel penalty tracks, and which one applies depends on the violation and the type of property involved.
Late Payment: The 50 Percent Penalty
When an insurer arbitrarily fails to pay within 30 days of satisfactory proof of loss, fails to make a written property damage settlement offer in that window, or fails to pay a written settlement on time, the penalty under subsection B is 50 percent of the amount found due (or $1,000, whichever is greater), plus any proven economic damages, plus attorney fees and costs. If the insurer made a partial payment, the 50 percent applies to the difference between what was paid and what was owed.2Louisiana State Legislature. Louisiana Code RS 22:1892 – Payment and Adjustment of Claims
Good Faith Breach: The Subsection I Penalty
For claims not involving damage to real property, breach of the good faith duty carries a penalty of up to 50 percent of damages sustained or $5,000, whichever is greater, along with attorney fees, costs, and proven economic damages. If the breach is based solely on failure to pay within the statutory period, you still have to prove the failure was arbitrary, capricious, or without probable cause. For damage to immovable property such as a house or commercial building, the statute routes you back to subsection B’s late payment penalties or to R.S. 22:1892.2.
Failure to Begin Adjusting
If the insurer never gets started, meaning it fails to initiate loss adjustment within 14 days (or 30 days for a catastrophic loss), the penalty is the greater of $5,000 or the amount available under subsection I. This one exists to reach insurers who simply ignore claims rather than working them badly.2Louisiana State Legislature. Louisiana Code RS 22:1892 – Payment and Adjustment of Claims
What You Cannot Recover Anymore
This is where the 2024 reform lands hardest on policyholders. Under the repealed R.S. 22:1973, courts could award general damages, including compensation for mental anguish, stress, and inconvenience caused by an insurer’s bad faith. That category is gone. Recovery is now limited to “proven economic damages,” which means receipts, invoices, and documentation of actual financial losses. The emotional cost of a long fight with your insurer no longer converts into a dollar figure under this statute.
Building the Claim
The policyholder carries the burden of proving bad faith. Slow and frustrating is not enough. You have to show the insurer’s conduct was arbitrary, capricious, or without probable cause, and the preparation for that starts well before any lawsuit.
The statutory clocks only begin running once the insurer receives “satisfactory proofs of loss.” Until you submit complete documentation, the insurer can argue the clock never started. Provide detailed repair estimates, photographs of the damage, and receipts for any emergency work already done. If the insurer sends specific claim forms, fill every field. Blanks give the insurer an excuse to say the proof was unsatisfactory.2Louisiana State Legislature. Louisiana Code RS 22:1892 – Payment and Adjustment of Claims
Keep a communication log. Every phone call gets a date, time, and name. Every email gets saved. When you send documents, use a delivery method that generates a receipt. This paper trail is your strongest evidence if the insurer later claims it never got your proof of loss or disputes the timeline.
Your Duty to Mitigate
Louisiana law expects reasonable steps to prevent further damage after a loss. If a storm tears part of your roof off, tarp it. Waiting six months for the insurer to respond while water destroys the interior shifts that avoidable deterioration onto you. The insurer still owes for the original damage, but Louisiana courts have applied a partial recovery approach that leaves the avoidable losses with the policyholder. Keep receipts for emergency repairs, because reasonable mitigation costs are typically reimbursable.
How Long You Have to File
R.S. 22:1892 does not specify a prescriptive period, and Louisiana courts have split on whether a bad faith claim sounds in tort (one-year prescription) or in contract (ten-year prescription). If the claim is treated as a tort, you may have as little as one year from when you knew or should have known about the bad faith conduct. If it’s contractual, the window could reach ten years.
Given that split, treat one year as your deadline. Betting on how a court will characterize your claim is a gamble with your right to file at all. If your insurer has denied or ignored your claim and the conduct looks arbitrary, consult an attorney promptly.
When Louisiana’s Law Does Not Apply
Two large categories of insurance sit outside R.S. 22:1892 because federal law displaces it.
Employer-Sponsored Plans (ERISA)
If your coverage comes through an employer-sponsored benefit plan, the federal Employee Retirement Income Security Act likely preempts Louisiana’s bad faith remedies. Under 29 U.S.C. ยง 1144(a), ERISA supersedes state laws that “relate to any employee benefit plan,” and federal courts have consistently held that state bad faith causes of action are preempted because they rest on general contract and tort principles rather than being insurance-specific regulations. Health, disability, or life insurance provided through your job generally does not carry the Louisiana statutory penalties. Your remedies come from federal law instead.3Office of the Law Revision Counsel. 29 USC 1144 – Other Laws
National Flood Insurance Program
Claims under the National Flood Insurance Program are governed exclusively by federal regulations, the National Flood Insurance Act, and federal common law, even when a private insurer issues the policy through the Write-Your-Own program. Federal courts have held that state bad faith claims arising from the handling of flood claims are preempted because they would increase fiscal pressure on FEMA, which ultimately funds the defense. If your flood claim is under a Standard Flood Insurance Policy, Louisiana’s penalties do not apply to how it’s handled.
Filing a Complaint With the Department of Insurance
You can also file a complaint with the Louisiana Department of Insurance, either before or alongside legal action. The online consumer complaint form walks you through the required information and generates a tracking number.4Louisiana Department of Insurance. Consumer Complaint Form Mail submissions to the Baton Rouge office are also accepted. An LDI investigator contacts the insurer and asks for a formal response. The department can apply pressure and impose regulatory consequences, but it cannot award you damages or penalties. Treat it as a parallel track that builds documentation and creates regulatory heat, not a substitute for a lawsuit when one is warranted.