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People

How long do you have to bring a bad faith insurance claim?

| Mar 18, 2020 | Firm News

Insurance companies want people to trust them, as that trust can lead people to inaction when a company fails to make good on their contractual obligations to policyholders in a bad faith insurance denial. Insurance companies love to advertise in ways that make them look like caring and concerned corporate entities, when, in reality, they have a profit motive for denying people adequate compensation under their policies.

That profit motive is one reason why the insurance companies that operate both in Louisiana and across the United States are subject to state and federal regulations that mandate how they handle claims related to legitimate policies. Companies have a legal obligation to pay on legitimate claims brought under the terms of the policy that a customer paid for.

When an insurance company denies a claim that they should probably have covered, offers an unreasonably low settlement or stalls paying a claim for an inappropriate amount of time, they have engaged in bad faith insurance practices. As a consumer, you have a right to hold insurance companies responsible for their bad faith actions, even years after the fact if it takes you a while to realize how inappropriate their response actually was.

In Louisiana, you have an entire decade to bring a claim

Each state has its own rules that insurance companies have to comply with in order to write policies and collect premiums in that state. Louisiana has specific bad faith insurance laws that it has clarified through a ruling made by the state Supreme Court in recent years.

Specifically, the courts affirmed the rights of a customer bringing a claim about bad faith practices for up to 10 years from the date of the incident or initial claim. That means you have many years to look over the situation and to take legal action against the insurance company.

This long amount of time actually benefits policyholders, as it can sometimes be years before people realize the true financial impact of an incident on their life. A settlement offer that once seemed reasonable or a claim denial that wasn’t initially a hardship could later seem much more negative in hindsight.

If you believe that an insurance company has denied your legitimate claim in bad faith, you could potentially seek up to double the amount of the actual claim by holding them accountable for bad faith insurance practices.