First-Party Property Damage Demand Letter - Louisiana

FIRST-PARTY PROPERTY DAMAGE DEMAND LETTER

State of Louisiana

[LAW FIRM LETTERHEAD]

PRIVILEGED AND CONFIDENTIAL
SETTLEMENT COMMUNICATION — FOR RESOLUTION PURPOSES ONLY
PROTECTED UNDER LA. CODE OF EVIDENCE ART. 408 AND FED. R. EVID. 408

VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED
AND VIA EMAIL TO: [ADJUSTER_EMAIL]

Date: [__/__/____]

[INSURANCE_COMPANY_NAME]
[PROPERTY_CLAIMS_DEPARTMENT_ADDRESS]
[________________________________]

Attention: [ADJUSTER_NAME], [ADJUSTER_TITLE]

Re: FORMAL DEMAND FOR FIRST-PARTY PROPERTY BENEFITS — LOUISIANA LAW
Insured: [INSURED_NAME]
Property Address: [PROPERTY_ADDRESS], [PARISH_NAME] Parish, LA
Policy Number: [POLICY_NUMBER]
Claim Number: [CLAIM_NUMBER]
Date of Loss: [__/__/____]
Type of Loss: [LOSS_TYPE]
Named Storm (if applicable): [STORM_NAME]
Coverage Limits: $[COVERAGE_LIMITS]
Response Deadline: [__/__/____]

Dear [ADJUSTER_NAME]:

I. INTRODUCTION AND NATURE OF DEMAND

This firm represents [CLIENT_NAME] ("our client"), the named insured under the above-referenced policy, in connection with a first-party property damage claim arising from the [__/__/____] loss at [PROPERTY_ADDRESS] in [PARISH_NAME] Parish, Louisiana. This letter constitutes a formal demand for payment of all policy benefits owed under Louisiana law and, where applicable, also serves as the cure period notice required by La. R.S. 22:1892.2 for catastrophic immovable property losses.

The Louisiana Legislature, in response to the insurance crisis following Hurricanes Laura, Delta, Zeta, and Ida, comprehensively restructured the bad faith statutes through Act 3 of the 2024 Regular Session (SB 323), effective July 1, 2024. This demand is issued with full knowledge of that framework.

II. LOUISIANA PROPERTY INSURANCE FRAMEWORK

A. Prompt Payment Under La. R.S. 22:1892 (As Amended)

La. R.S. 22:1892(A)(1) requires an insurer to "pay the amount of any claim due any insured within thirty days after receipt of satisfactory proofs of loss." La. R.S. 22:1892(A)(3) provides a separate thirty-day clock for initiation of loss adjustment on property claims and a 30-day deadline to make a written offer of settlement after receipt of satisfactory proofs of loss. For catastrophic losses to immovable property, La. R.S. 22:1892(A)(4) formerly extended this period to 30 days for adjustment and imposed parallel duties.

Penalties under § 1892(B)(1): If an insurer fails to pay within the statutory period and such failure is found to be "arbitrary, capricious, or without probable cause," the insurer is liable for:

• Fifty percent (50%) damages on the amount found due, OR
• For claims on immovable property, penalties not to exceed 50% of damages or $5,000, whichever is greater; plus
• Reasonable attorney fees and costs.

B. La. R.S. 22:1892.2 — Mandatory Pre-Suit Cure Notice (Catastrophic Immovable Property Losses)

Act 3 of 2024 enacted La. R.S. 22:1892.2, which now requires that for claims arising from a catastrophic loss to immovable property, the insured must provide a written cure-period notice to the insurer before filing suit for penalties and attorney fees. Key provisions:

• Notice may be provided on a Louisiana Department of Insurance form or by formal written demand;
• The insurer has a sixty (60)-day cure period to pay the full amount sought in the notice;
• If the insurer pays the full amount within 60 days, no cause of action for penalties and attorney fees under § 1892.2 shall lie;
• If the insurer makes a partial payment within 60 days, the penalty is reduced by one-half;
• Compliance with § 1892.2 is a condition precedent to a cause of action under that section for catastrophic immovable property claims.

[ ] This letter constitutes the § 1892.2 cure period notice. The sixty (60) day cure period begins running today, [DATE].

C. Repeal of La. R.S. 22:1973

Effective July 1, 2024, Act 3 repealed La. R.S. 22:1973 in its entirety. The general duty of good faith and fair dealing formerly codified in § 1973 — including the remedy of "up to two times the damages sustained" — is now consolidated within La. R.S. 22:1892 and § 1892.2. For causes of action arising before July 1, 2024, § 1973 remedies remain available. Counsel should carefully verify which statutory regime applies to the date of loss.

D. Louisiana Valued Policy Law — La. R.S. 22:1318

Under Louisiana's Valued Policy Law (La. R.S. 22:1318), if the insurer placed a valuation on the insured immovable property and used that valuation to compute the premium, and if the property is a total loss from a covered peril, the insurer must pay the full insured value without deduction or offset, unless the policy and application set forth, in type of equal size, the actual method of loss computation. The VPL does not resolve causation disputes in mixed-peril hurricane claims — a total loss must be "caused" by a specified covered peril. See Chauvin v. State Farm Fire & Cas. Co., 495 F.3d 232 (5th Cir. 2007).

E. Unfair Trade Practices — La. R.S. 22:1961 et seq.

La. R.S. 22:1964 enumerates unfair and deceptive acts in the business of insurance. La. R.S. 22:1973 previously supplied the private right of action; following Act 3 of 2024, enforcement of § 1964 practices is primarily administrative through the Louisiana Department of Insurance, with § 1892 providing the insured's monetary remedies.

F. Louisiana Citizens Property Insurance Corporation

If the policy at issue is with Louisiana Citizens (the state's insurer of last resort under La. R.S. 22:2292), the insurer remains subject to the same prompt payment and bad faith duties as any private insurer, and additional statutory provisions governing assessments and emergency assessments may apply.

III. POLICY INFORMATION AND COVERAGE

A. Policy Details

B. Coverage Limits

C. Coverage Analysis

The loss is plainly covered under Louisiana principles of contract interpretation (La. C.C. arts. 1983, 2046, 2049):

1. The cause of loss — [CAUSE_OF_LOSS] — is a covered peril under [POLICY_PROVISION];
2. The damage occurred during the policy period on [__/__/____];
3. The property is "covered property" as defined in [COVERAGE_SECTION];
4. No exclusion applies that would bar coverage for the principal loss;
5. All conditions precedent (notice, proof of loss, cooperation, mitigation) have been satisfied.

Under Louisiana law, any ambiguity in the policy is construed against the insurer as drafter (La. C.C. art. 2056; Cadwallader v. Allstate Ins. Co., 848 So. 2d 577 (La. 2003)).

IV. THE LOSS EVENT

A. Description of Loss

On [__/__/____], at approximately [TIME], the insured property sustained significant damage as a result of [DESCRIBE_LOSS_EVENT]. The loss [WAS/WAS NOT] caused in whole or in part by [STORM_NAME] or other named peril.

[DETAILED_NARRATIVE_OF_LOSS: ___________________________________]

B. Cause and Origin

The cause of loss was:

☐ Fire (accidental / electrical / HVAC / other)
☐ Wind / Windstorm (covered under LA HO-3 as named peril)
☐ Hail
☐ Hurricane / Named Storm ([STORM_NAME])
☐ Tornado
☐ Lightning
☐ Water damage (plumbing / appliance / wind-driven rain via opening created by covered peril)
☐ Theft or vandalism
☐ Other: [________________________________]

C. Mitigation Efforts (La. Policy Condition)

Our client fulfilled all post-loss duties under the policy including mitigation and preservation of property:

Reasonable mitigation costs are reimbursable under the policy's "reasonable repairs" provision and § 22:1311's Standard Fire Policy form.

V. CLAIM HANDLING HISTORY

A. Claim Timeline

B. The Company's Position and Our Response

[CARRIER_SHORT_NAME] has [DESCRIBE_INSURER_POSITION: denied / partially paid / delayed / assigned inadequate scope / invoked engineer report].

This position is unreasonable and contrary to Louisiana law because:

• [EXPLAIN_WHY_WRONG_1]
• [EXPLAIN_WHY_WRONG_2]
• [EXPLAIN_WHY_WRONG_3]

VI. DAMAGES AND CLAIMED AMOUNTS

A. Dwelling (Coverage A) Damage

B. Other Structures (Coverage B)

$[TOTAL_OTHER_STRUCTURES] (detached garage, fence, shed, pool cabana, etc.)

C. Personal Property / Contents (Coverage C) — Replacement Cost

D. Additional Living Expenses (Coverage D)

E. Claim Summary

VII. GENERAL CONTRACTOR OVERHEAD AND PROFIT ("O&P")

Under Louisiana law and established industry practice, the insured is entitled to general contractor overhead and profit when repairs are reasonably likely to involve three or more trades. See Tingle v. American Home Assur. Co., 2004 WL 2669280 (E.D. La. 2004); and the well-established "three-trade rule." The industry-standard calculation is ten percent (10%) overhead plus ten percent (10%) profit (10+10) on repair costs.

[CARRIER_SHORT_NAME]'s [refusal to include / reduction of] O&P is inconsistent with Louisiana law, policy language ("replacement cost without deduction for depreciation"), and established industry practice.

VIII. VALUED POLICY LAW DEMAND (IF TOTAL LOSS)

If the loss constitutes a total loss of the immovable property under La. R.S. 22:1318, our client is entitled to the full dwelling value stated on the declarations page — $[DWELLING_LIMIT] — without offset for depreciation, salvage, or repair cost. The only exception is where the policy, in type of equal size, sets forth a different method of loss computation. No such equal-size provision exists in this policy.

Accordingly, upon a finding of total loss caused by a covered peril, our client is entitled to $[VPL_AMOUNT] under the Valued Policy Law alone, independent of the other coverages.

IX. APPRAISAL (IF POLICY PROVIDES)

Louisiana has no mandatory appraisal statute. Appraisal is available only if provided by the policy's terms. If the policy contains an appraisal clause and the parties cannot agree on the amount of loss, we hereby invoke the appraisal process and appoint [APPRAISER_NAME] as our client's competent, disinterested appraiser. Please identify [CARRIER_SHORT_NAME]'s appraiser within the period required by the policy. Coverage questions are not submitted to appraisal and are reserved for judicial resolution. See Zurich Am. Ins. Co. v. Maison Royale, LLC, No. 18-11612 (E.D. La. 2019).

X. STATUTORY VIOLATIONS AND BAD FAITH

A. Violations of La. R.S. 22:1892

[CARRIER_SHORT_NAME] has violated La. R.S. 22:1892 by:

☐ Failing to initiate loss adjustment within statutory period
☐ Failing to make a written settlement offer within 30 days of satisfactory proofs of loss
☐ Failing to pay undisputed amounts within 30 days
☐ Issuing a lowball estimate inconsistent with the documented scope of loss
☐ Relying on a manifestly inadequate engineer report
☐ Requiring duplicative/unreasonable documentation
☐ Other: [________________________________]

B. Violations of La. R.S. 22:1964 (Unfair Trade Practices)

[CARRIER_SHORT_NAME] has engaged in acts prohibited by La. R.S. 22:1964, including:

• Misrepresenting pertinent facts or policy provisions;
• Failing to acknowledge and act reasonably promptly upon communications;
• Failing to adopt reasonable standards for prompt investigation;
• Refusing to pay without conducting a reasonable investigation;
• Failing to attempt in good faith to effectuate prompt, fair, equitable settlement when liability is reasonably clear;
• Compelling insured to institute litigation to recover amounts due;
• Attempting to settle for less than a reasonable person would believe owed;
• Failing to provide reasonable explanation of the basis in the policy for denial or inadequate offer.

C. "Arbitrary, Capricious, or Without Probable Cause" Standard

The Louisiana Supreme Court in Reed v. State Farm Mut. Auto. Ins. Co., 857 So. 2d 1012 (La. 2003), held that penalties under § 1892 are warranted when an insurer's refusal to pay is "vexatious" and "without reasonable or probable cause or excuse." Insurers cannot manufacture coverage defenses to avoid payment, nor can they rely on engineering reports that ignore documented conditions.

D. Available Remedies

• Contract damages (policy benefits)
• § 1892 penalty: 50% of amount due (arbitrary/capricious standard)
• Reasonable attorney fees and costs
• Judicial interest from date of judicial demand (La. C.C. art. 2000)
• § 1892.2 penalties for catastrophic immovable property losses (if cure period expired without payment)

XI. DEMAND

A. Monetary Demand

We demand payment of $[TOTAL_DEMAND]:

XII. RESPONSE DEADLINE AND CURE PERIOD

For catastrophic immovable property losses: The sixty (60)-day cure period under La. R.S. 22:1892.2 begins running on the date this notice is received. [CARRIER_SHORT_NAME] must tender the full amount sought, $[TOTAL_DUE], on or before [__/__/____] (the 60th day), or face full statutory penalties.

For non-catastrophic claims: This demand expires at 5:00 p.m. Central Time on [__/__/____] (the 30th day under § 1892(A)(1)).

Consequences of Non-Compliance

If [CARRIER_SHORT_NAME] fails to tender the demanded amount by the applicable deadline:

1. Suit will be filed in [PARISH_NAME] Parish District Court (or the Eastern/Middle/Western District of Louisiana) seeking:
   - All policy benefits
   - § 1892 and § 1892.2 penalties
   - Reasonable attorney fees and costs
   - Judicial interest from date of judicial demand
   - Valued Policy Law benefits (if total loss)
2. Regulatory complaint will be filed with the Louisiana Department of Insurance, 1702 N. Third Street, P.O. Box 94214, Baton Rouge, LA 70804-9214;
3. Appraisal will be demanded (if the policy provides and the dispute concerns amount of loss only).

XIII. DOCUMENT PRESERVATION NOTICE

This letter serves as formal notice to preserve all documents, electronically stored information, adjuster diaries, claims notes, photographs, engineering reports, estimates, Xactimate files (including F9 audit logs), reserve information, supervisor approvals, reinspection reports, training materials, and internal communications concerning this claim. Failure to preserve will be the subject of sanctions and adverse inference instructions at trial.

XIV. PRESCRIPTION / CONTRACTUAL LIMITATIONS

A first-party insurance contract claim is a personal action governed by the ten (10)-year prescriptive period of La. C.C. art. 3499, unless the policy shortens the limitations period. Louisiana's Standard Fire Policy (La. R.S. 22:1311) imposes a twenty-four (24)-month suit limitation from the date of loss for certain fire/property claims. Following Hurricane Ida, the Louisiana Legislature extended the suit limitation to 24 months for named-storm claims arising from Hurricanes Laura, Delta, Zeta, and Ida. Counsel should confirm the applicable limitations period for this specific loss and policy form.

Date of Loss: [__/__/____]
Contractual Limitations Date: [__/__/____]

XV. CONCLUSION

[CARRIER_SHORT_NAME] sold our client a policy promising protection against exactly this type of loss. The loss has occurred. Coverage is clear. Only payment is missing. Louisiana law — particularly as restructured by Act 3 of 2024 — provides both a cure opportunity and meaningful penalties for insurers who refuse to honor their contractual obligations. We invite [CARRIER_SHORT_NAME] to take the cure opportunity and resolve this claim fully.

Respectfully submitted,

[LAW_FIRM_NAME]

By: _______________________________
[ATTORNEY_NAME]
Louisiana Bar Roll No. [BAR_NUMBER]
[ADDRESS]
[CITY], LA [ZIP]
Phone: [PHONE]
Email: [EMAIL]

Counsel for [CLIENT_NAME]

ENCLOSURES:

• Policy declarations page and relevant policy provisions
• Sworn Proof of Loss (if submitted)
• Contractor estimate (Xactimate or equivalent)
• Photographs and video documentation
• Personal property inventory (Coverage C schedule)
• Engineer report (if any)
• ALE receipts and documentation
• Mitigation invoices and proof of payment
• Prior correspondence with [CARRIER_SHORT_NAME]
• LA DOI § 1892.2 cure notice form (if used)

CC:

• [CLIENT_NAME]
• [MORTGAGEE_NAME] (loss payee, if applicable)
• Louisiana Department of Insurance, P.O. Box 94214, Baton Rouge, LA 70804-9214

LOUISIANA PROPERTY INSURANCE QUICK REFERENCE

SOURCES AND REFERENCES

• La. R.S. 22:1892 — Prompt Payment; Penalties: https://legis.la.gov/Legis/Law.aspx?d=509041
• Act 3 of 2024 Regular Session (SB 323) — Bad Faith Overhaul: https://legis.la.gov/legis/ViewDocument.aspx?d=1372369
• La. R.S. 22:1318 — Valued Policy Clause: https://law.justia.com/codes/louisiana/revised-statutes/title-22/rs-22-1318/
• La. R.S. 22:1269 — Direct Action Statute: https://legis.la.gov/legis/Law.aspx?d=508142
• La. R.S. 22:1961 et seq. — Unfair Trade Practices
• La. C.C. arts. 1983, 2046, 2049, 2056 — Contract Interpretation
• Reed v. State Farm Mut. Auto. Ins. Co., 857 So. 2d 1012 (La. 2003)
• Cadwallader v. Allstate Ins. Co., 848 So. 2d 577 (La. 2003)
• Chauvin v. State Farm Fire & Cas. Co., 495 F.3d 232 (5th Cir. 2007)
• Louisiana Department of Insurance: https://www.ldi.la.gov/
• Louisiana Citizens Property Insurance Corporation: https://www.lacitizens.com/