New Orleans Insurance Claims

INSURANCE CLAIMS AFTER DISASTER

In the aftermath of a hurricane and disaster, Louisiana homeowners and businesses are continuing to process their insurance claims. After years of promptly paying insurance premiums, many insurance companies are breaking their PROMISE to timely pay insured damages and losses. As a result, policyholders are unable to immediately rebuild their homes and businesses.

Louisiana has specific laws designed to discourage and punish insurance companies and compensate the policyholder for not properly processing an insurance claim. The duty of “good faith and fair dealing” requires an insurance company to adjust Hurricane Ida claims fairly and promptly make reasonable efforts to timely settle claims with the policyholders. An insurance company is in “bad faith” when the insurer violates its duty to timely pay for losses and/or damages to the policyholder. In such case, the insurance company is liable to pay the policyholder monetary penalties and attorneys’ fees for its “bad faith.” Louisiana insurance law specifically requires an insurance company to comply with the following legal duties:

Promptly Adjust the Insurance Claim

Louisiana law requires a property insurance company to “initiate loss adjustment” within 30 days of notification of the claim. Specifically, an insurance company has to assign an adjuster to quickly inspect the loss. This duty exists because delays in the claims process can be devastating for policyholders who drastically need these funds. If you had to wait over 30 days for an adjuster to begin adjusting your loss, your insurance company may have violated this legal duty.

Misrepresenting Pertinent Facts or Insurance Policy Provisions

When adjusting a claim, an insurance company is prohibited from misrepresenting pertinent facts or insurance policy provisions including exclusions to the policy. This means that an insurance company shall not misrepresent to the policyholder that damages are payable due to wear and tear, a pre-existing event or damage caused by other causes aside from wind driven rain. Simply, an insurance adjuster cannot represent to a policyholder that damages are not recoverable when it is undisputed such line-item of damages are subject to reimbursement by said policy. 

Pay Claims Within 30 Days After Receiving “Satisfactory Proof of Loss”

Louisiana law requires insurance companies to pay claims timely. If an insurance company does not pay a claim within 30 days after receiving “satisfactory proof of loss”, then the insurance company may be in “bad faith”. “Satisfactory proof of loss” is a detailed statement of the amount owed to the policyholder. A proof of loss typically includes supporting documentation such as photos, videos, contractor repair estimates, invoices, receipts, contents lists, expert reports and other relevant information that substantiates your insurance claim. This requirement discourages insurance companies from ignoring and delaying payment of claims when a policyholder is teetering on the brink of financial ruin following a catastrophic hurricane. If you submit documentation to your insurance company proving entitlement to payment of damages and forced to wait over 30 days for payment, your insurance company may be in “bad faith”.

Improper Denial of a Claim

If an insurance company fails to fully pay a valid claim and such non-payment or partial payment was “arbitrary, capricious, or without probable cause,” then the insurance company may be in “bad faith.” This requirement discourages insurance companies from mistreating policyholders after a catastrophic event like Hurricane Ida. Such improper denial or deficient payments of a valid Hurricane Ida claim could force families and small businesses to experience financial ruin.

If an insurance company violates the above legal duties, you may be entitled to collect penalties and attorney’s fees in addition to your unpaid damages. If you believe your Hurricane Ida insurance claim was denied, delayed or partially paid, you may be entitled an award of penalties and attorneys’ fees from the insurance company.

Our firm has prosecuted over 3000 wind and flood claims since Hurricane Katrina for homeowners and businesses. You can call THE SUNSERI LAW FIRM, LLC, at no obligation, if you have any questions about any aspect of your hurricane claim.

INSURANCE CLAIMS FOR BUSINESS

If your business sustained physical damage which renders your business not operational, then you may have insurance coverage for business interruption if such coverage is included in your insurance policy. This coverage provides payments for your business’ lost income arising from Hurricane Ida. At the present time, many business owners who are unable to operate due to lack of power and water are being denied business interruption coverage due to the lack of physical damage and the insurance company’s refusal to activate “Civil Authority” provisions of business policies.

If your business did not sustain physical damage, then the only other mechanism to activate business interruption insurance coverage is under “Civil Authority”. This provision is applicable if you are prohibited from accessing your business due to a governmental decree. Civil Authority coverage is activated if all of the following elements are met:

1. Government authority prohibits access to the insured property;
2. The prohibition was issued as a result of physical loss or damage caused to property within a one-mile radius of the insured property; and
3. The expiration of the stipulated waiting period (usually between 24-72 hours).

For Hurricane Ida, “Civil Authority” will be a complicated and highly contested legal question because Parishes in the greater New Orleans area did not officially order a mandatory evacuation (except for outside levee protection and low-lying areas). Conversely, government officials stated it was too late for a mandatory evacuation but implied that an evacuation order would have been issued otherwise. Government officials recommended that residents and businesses owners leave and further recommended that residents who left stay away. Also, curfews were imposed. It is anticipated that many insurance companies will allege that the Civil Authority coverage is not activated since a mandatory evacuation was not formally issued.

In response to the anticipated denial of business interruption claims, we believe that the communications of government officials constituted “de-facto” application of Civil Authority. Specially, governmental officials recommended residents leave, if possible, to stay away pending restoration of power/utilities, access to gas, clearing obstructions to roads and the imposition of curfews. Accordingly, we will vigorously argue that the requirements for “Civil Authority” were effectively satisfied to activate business interruption insurance coverage.

Finally, there may be “contingent business interruption” coverage due to disruptions to certain suppliers and/or customers which result in losses. A few policies even provide coverage for disruption of power.

It is important to note insurance policies differ significantly from policy to policy. Therefore, you must read the specific terms and conditions to identify primarily and secondary coverages for your business insurance policy. The specific terms and conditions within each policy will ultimately determine if coverage is available. 

Our firm has prosecuted over 3000 wind and flood claims since Hurricane Katrina for homeowners and businesses. You can call THE SUNSERI LAW FIRM, LLC, at no obligation, if you have any questions about any aspect of your hurricane claim.

HOW TO RESPOND TO LOW BALL ESTIMATES

OF INSURANCE COMPANY AFTER A  DISASTER

There are several knee-jerk defenses set forth by insurance companies in responding to homeowners seeking payment for specific damages arising from a Hurricane or disaster. Often, policyholders do not know how to respond to the insurance company denying payment of certain types of water damage. The following are suggested responses to an insurance company’s refusal to pay specific damages caused by Hurricane Ida.

Roof Repair Instead of Replacement

It is undisputed the majority of roofs in the pathway of Hurricane Ida need to be replaced instead of repaired/patched. It is recommended your licensed roofing contractor insert a statement in the estimate and/or invoice that the roof needs to be replaced and the testing/analysis utilized in arriving to such conclusion. This roofer’s statement may persuade the insurance company to pay for a roof replacement instead of a repair/patch.

Sheetrock/Walls/Ceilings

Most homeowners with roof damage also had corresponding water damage to sheetrock, ceilings, and walls. Sheetrock ceilings and walls are spongy, soft and absorb water.  Insurance adjusters often pay for merely repair and painting of sheetrock and ceilings instead of replacement. If your hurricane damaged ceiling and/or wall display is bulging, sagging and/or bubbling, the water damaged sheet rock must be removed and replaced due to high moisture content and the possibility of mold growth. Also, sheetrock may contain a high moisture content without visible manifestation due to water infiltration.  If the sheetrock is not replaced but simply sprayed with disinfectant and painted, such will be a recipe for mold growth and other further complications. Therefore, the water damaged sheet rock must be removed and replaced.

Mold

On occasion, insurance companies attempt to deny payment for water damaged walls and ceilings based on the “mold” exclusion’. The “mold” exclusion does not apply for the removal of water damaged walls and ceilings which later develop mold. The mold exclusion only applies when mold travels to walls that are not water damaged.

Seepage

Hurricane Ida caused water infiltration through windows and doors arising from the wind-driven rain. Many claims’ adjusters have attempted to disallow damage based on the “seepage” exclusion. The “seepage” exclusion should only apply for moisture gradually entering a pre-existing opening over an extended period of time. The “seepage” exclusion does not apply for water infiltration from hurricane winds caused by vibration and compromise of the seal to doors and windows.

Water Damaged Wood Floors

Water is a hardwood floor’s worst enemy. Wood flooring is not resistant to water.  Wood floors will become damaged if water is allowed to soak into it. Signs of permanent damage are as follows: 

• Staining and discoloration
• Cupping and buckling
• Lifting nails
• Lifting floorboards
• Mold growth

Yet, many insurance companies will only pay for sanding down, repair or patching if the wood floor is saturated by water/rain. In such a case, it is undisputed the insurance company is required to pay for a full replacement of the entire continuous area of the damaged wood floors. 

Also, many adjusters attempt to state that the water damaged portion of the wood floor could be replaced while the undamaged wood flooring remains in a mismatched presentation. Again, the insurance company is required to replace the entire continuous area of damaged wood floors as opposed to being required to have 2 contrasting and unmatched areas featuring the replaced wood floor and the undamaged floor.

Our firm has prosecuted over 3000 wind and flood claims since Hurricane Katrina for homeowners and businesses. You can call THE SUNSERI LAW FIRM, LLC, at no obligation, if you have any questions about any aspect of your hurricane claim.