In a Puerto Rico Hurricane Michael case involving a Zurich Insurance Company providing a policy to a Louisiana policyholder, an alleged delayed payment resulted in attorneys for Zurich arguing that they could delay owed payments for various excuses. The first issue was what a proof of loss meant under Louisiana law.

The court found the following regarding a proof of loss in Louisiana:1

[A]ccording to Lamar, ‘satisfactory proof of loss’ is a flexible requirement, that does not need to be in a formal style and is satisfied by an insurer ‘receive[ing] sufficient information to act on the claim.’ (Id. (citing Grilletta v. Lexington Ins. Co., 558 F.3d 359, 368 (5th Cir. 2009)).) As examples of satisfactory proof of loss, Lamar outlines that Louisiana courts have accepted: a handwritten estimate of the cost of repairs (id. at 19–20 (citing Sevier v. United States Fid. & Guar. Co., 497 So. 2d 1380 (La. 1986)); a personal inspection of an insured’s property by an independent adjuster (id. at 20 (citing J.R.A. Inc. v. Essex Ins. Co., 2010-0797 (La. App. 4 Cir. 5/27/11); 72 So. 3d 862, 881)); proof of insurance, photographs, and salvage information (id. (citing State Farm Mut. Auto. Ins. Co. v. Norcold, Inc., 2011-1355 (La. App. 3 Cir. 4/4/12); 88 So. 3d 1245)); and an independent adjuster’s opportunity to discover but failure to do so (id. (citing Aghighi v. Louisiana Citizens Prop. Ins. Corp., 2012-1096 (La. App. 4 Cir. 6/19/13), 119 So. 3d 930, 934).)

The federal court noted that:

Louisiana has adopted ‘liberal rules concerning the lack of formality relative to proof of loss.’ Sevier v. U.S. Fid. & Guar. Co., 497 So. 2d 1380, 1384 (La. 1986). Satisfactory proof of loss, as required for an insured to obtain penalties from an insurer, is that which is sufficient to fully apprise the insurer of the claim and extent of the damage. Louisiana Bag Co., 2008-0453, p.16, 999 So. 2d at 1115; McDill v. Utica Mutual Insurance Company, 475 So. 2d 1085, 1089 (La. 1985). So long ‘as the insurer obtains sufficient information to act on the claim, ‘the manner in which it obtains the information is immaterial.’ ‘ Sevier, 497 So. 2d at 1384 (quoting Austin v. Parker, 672 F.2d 508, 520 (5th Cir. 1982)). Thus, a ‘satisfactory proof of loss occurs when the insurer has adequate knowledge of the loss.’ In re Hannover Corp. of America, 67 F.3d 70, 73 (5th Cir. 1995). (citations omitted).

The federal court found that the issue is for the jury to determine:

[T]o the extent that Lamar contends Zurich’s adjusters did not act reasonably, the Court likewise finds that genuine issues of material fact preclude summary judgment. ‘An insurer’s conduct depends on the facts known to the insurer at the time of its action ….’ La. Bag, 999 So. 2d at 1114. “When the insured claims penalties for refusal to pay a claim timely, the inquiry usually focuses on whether the insurer acted reasonably in its adjustment of the claim based on the facts known or that should have been known by the insurer. Normally, the reasonableness of the insurer’s claims handling will be a factual issue, and cases involving this issue will be fact specific.

Zurich took forever to pay this claim. My blog post last week about this case, Insurance Companies Have 30 Days To Pay Or Be Subject To Penalties In Louisiana, illustrated why Zurich should never be your insurance company based on what their own company attorneys argue is an acceptable standard for late and delayed claims payments by Zurich claims management.

Thought For The Day

Your most unhappy customers are your greatest source of learning.
—Bill Gates
1 Lamar Advertising v. Zurich American Ins. Co., No. 18-cv-1060 F.Supp.3d 632 (M.D. La. Mar. 29, 2021).