Louisiana has one of the nation’s strongest bad faith insurance laws. When an insurer wrongfully denies your claim, Louisiana Revised Statutes § 22:1973 allows you to recover the full claim amount plus a 50% penalty and attorney fees. This powerful remedy makes it expensive for insurers to wrongfully deny claims in Louisiana and gives you real leverage to fight back and recover everything you’re owed.

Understanding Louisiana’s bad faith statute and appeal process can result in significant recovery when your claim is wrongfully denied. This guide explains your rights and the exact steps to pursue recovery.

Louisiana Insurance Claim Denial: Key Facts

Aspect	Details
Insurance Regulator	Louisiana Department of Insurance (ldi.la.gov)
Internal Appeal Deadline	30 days (property) / 15 days (health)
External Review Available	Yes (health insurance)
Bad Faith Statute	LA Rev. Stat. § 22:1973 (failure to settle) + common law
Bad Faith Remedies	Claim amount + 50% penalty + attorney fees + interest
File DOI Complaint	ldi.la.gov (complaint portal)

Reasons Insurance Companies Deny Claims

Louisiana insurers deny claims citing policy exclusions, alleged misrepresentation on the application, coverage gaps, late notice of loss, or disputes about the cause of loss. Health claims may be denied as “not medically necessary”; property claims may be denied based on alleged excluded perils, pre-existing conditions, or claims that damage resulted from wear-and-tear rather than a covered cause. Some denials are legitimate; others reflect careless investigation or aggressive policy interpretation designed to minimize the insurer’s payout.

Your Right to Appeal a Denied Claim in Louisiana

Step 1 — Internal Appeal

When your claim is denied, the insurer must provide written notice explaining the reason. You have 30 days (for property claims) or 15 days (for health claims) to request an internal appeal. Submit a written appeal to the insurer’s appeals department with any new evidence, documentation, expert reports, or a detailed explanation of why the denial was incorrect. Include the policy, photographs, repair estimates, medical records, and relevant supporting documents. Request written confirmation of receipt.

Step 2 — External / Independent Review

For health insurance claims denied for medical reasons, Louisiana allows external review. You can request an independent medical review if you believe the insurer’s denial lacked medical foundation. Contact the Louisiana Department of Insurance to request review within the timeframe specified in your denial letter. An independent medical expert will evaluate the claim.

Step 3 — File a Complaint with the Louisiana Department of Insurance

If your appeal is denied, file a formal complaint with the Louisiana Department of Insurance (ldi.la.gov). The Department will investigate whether the insurer violated LA Rev. Stat. § 22:1973 or committed bad faith. While the Department cannot award money directly, a finding against the insurer strengthens your position if you pursue litigation or settlement negotiations.

Bad Faith Insurance in Louisiana

Louisiana Revised Statutes § 22:1973 is one of the nation’s strongest bad faith statutes. It prohibits insurers from failing to attempt in good faith to settle claims, refusing to settle without a reasonable basis, and refusing to settle within policy limits. Louisiana also recognizes common law bad faith based on the insurer’s duty of good faith and fair dealing.

If you prove the insurer violated § 22:1973 or committed bad faith, you recover: (1) the full claim amount, (2) a penalty equal to 50% of the claim amount, (3) attorney fees and court costs, and (4) interest on the delayed payment. This 50% penalty makes bad faith claims exceptionally valuable in Louisiana. A $100,000 claim with a wrongful denial becomes a potential $150,000+ recovery (claim + 50% penalty + attorney fees + interest).

To succeed on a bad faith claim in Louisiana, you must establish that the claim was covered under the policy and that the insurer’s denial or refusal to settle was unreasonable or made without proper investigation. Louisiana courts interpret the statute broadly to protect policyholders.

Real Situations in Louisiana

New Orleans homeowner, Hurricane damage: A New Orleans homeowner filed a claim for Hurricane damage estimating $127,000 in losses (roof, walls, contents). The insurer initially denied the claim, asserting that the damage was due to “flooding” (allegedly excluded) and not wind damage. The homeowner appealed with photographs, expert assessment proving the damage pattern was consistent with wind (not flood), and the adjuster’s own report supporting wind damage. The insurer reversed the denial and paid the claim. The homeowner negotiated an additional $65,000 settlement (50% penalty under § 22:1973 plus attorney fees) based on the unreasonable initial denial.

Baton Rouge business, contents claim: A Baton Rouge wholesale business filed a claim for contents destroyed in a covered fire, claiming $275,000 in losses. The insurer delayed investigation for four months, missed multiple deadlines, and finally denied the claim without substantial justification. The business owner filed a complaint with the Louisiana Department of Insurance, which found the insurer violated § 22:1973. The insurer settled for $412,500 (the $275,000 claim + $137,500 penalty under § 22:1973, plus attorney fees and interest).

Lafayette health insurance claim: A Lafayette resident’s claim for emergency room care following an accident was denied by the health insurer, which claimed the condition was “not an emergency” without medical evidence. The patient requested external review. An independent medical expert found the condition was indeed a medical emergency. The insurer was required to pay the claim, the patient’s out-of-pocket costs, and interest.

Common Mistakes Louisiana Policyholders Make

Not understanding the 50% penalty opportunity: Many Louisiana policyholders accept settlement of just the claim amount without realizing they can claim a 50% penalty under § 22:1973 for bad faith denial. This penalty applies when the insurer failed to attempt good faith settlement. Discuss this with an attorney before settling.
Not documenting the insurer’s failure to investigate or communicate: If the adjuster fails to inspect, provides contradictory information, or misses deadlines, document it thoroughly. This evidence is critical to proving bad faith and securing the 50% penalty.
Appealing without professional assistance: For larger claims or particularly egregious denials, consider consulting an attorney during the appeal process. An attorney’s involvement often encourages insurers to reverse denials quickly, and it positions you well for negotiating the bad faith penalty if needed.

This article is for informational purposes only and does not constitute legal advice. Insurance laws change frequently. Verify current deadlines with the Louisiana Department of Insurance or a licensed attorney. Last reviewed: March 2026.

Louisiana Insurance Claim Denial Laws: Your Rights and How to Appeal (2026)