How Are Claims Paid & Depreciation Recovered?
Actual Cash Value & Replacement Cost
Depending on the terms of the insurance policy, some losses may be based on actual cash value (ACV) and other losses based on replacement cost (RC). ACV is the amount needed to repair or replace the damaged or destroyed property, minus the depreciation. RC involves the initial payment of actual cash value (ACV) of a loss, and the subsequent payment of the additional amount that is actually and necessarily expended to repair or replace the damaged or destroyed property. Please look at your policy for details about your loss payment.
Depreciation is the difference between the cost required to actually repair or replace the damaged item and its value before it was destroyed. While that amount may be withheld from you initially, it may be “recoverable” and refunded to you if your policy provides replacement cost coverage. The appropriate policy deductible will also be applied to arrive at the net settlement amount.
Order of Payments
If your policy allows for replacement cost, two or more payments may be made.
- The initial payment will be for the actual cash value of the item(s).
- The remaining (deferred amount) may be claimed upon replacement of the item(s) within the specified time frame allowed in your policy.
Structure & Content Valuation
Covered structure and property are paid based on the estimates prepared by field adjusters, contractors and experts that may be necessary for determining the value of the claim as well as documentation submitted.
Amount of Time To Begin Loss Adjustment & Pay Claim – Potential Penalties & Attorney Fees
Pursuant to La. R.S. 22:1892 and 22:1973, except in the case of catastrophic loss, the insurer shall initiate loss adjustment of a property damage claim and/or a claim for reasonable medical expenses within fourteen (14) days after notification of loss by the claimant.
In the case of catastrophic loss, the insurer shall initiate loss adjustment of a property damage claim within thirty (30) days after notification of loss by the claimant unless the Commissioner of Insurance promulgates a rule to extend the time period for initiating a loss adjustment for damages arising from a presidentially declared emergency or disaster or a gubernatorially declared emergency or disaster for up to an additional thirty (30) days. Thereafter, one additional extension of the period of time for initiating a loss adjustment may be allowed by the Commissioner of Insurance if approved by the Senate Committee on Insurance and the House
Committee on Insurance.
All insurers shall make a written offer to settle any property damage claim, including a third-party claim, within thirty (30) days after the receipt of satisfactory proof of loss of that claim.
Failure to make such payment within thirty (30) days after receipt of such satisfactory written proofs and demand thereof or failure to make a written offer to settle any property damage claim, including a third-party claim, within thirty (30) days after receipt of a satisfactory proof of loss of that claim may result in a late penalty against the insurer in addition to the payment of the claim. If the insurer is found to be arbitrary, capricious, or without probable cause in settling any property damage claim, the insurer must pay the insured, in addition to the amount of the loss, fifty percent (50%) damages on the amount found to be due from the insurer to the insured, or one thousand dollars ($1,000.00), whichever is greater, as well as attorney fees and costs, if applicable.
Hurricane Laura- Sixty Day Period To Begin Loss Adjustment
According to Department of Insurance Office of the Commissioner Emergency Rule 45 Promulgated in accordance with
Proclamation No. JBE 2020-108, Proclamation JBE 2020-115, R.S. 22:2, R.S. 22:11, and R.S. 22:1961 et seq, R.S. 49:950 et seq
§4543. Sixty Day Period to Initiate Adjustment of
A. In accordance with R.S. 22:1892(A)(3), Hurricane
Laura and its aftermath qualifies as a catastrophic loss event
that requires insurers to initiate loss adjustment of a property
damage claim within 30 days after notification of loss by the
B. In furtherance of R.S. 22:1892(A)(3), the severity of
the devastation caused by Hurricane Laura and its aftermath
qualifies for an additional thirty (30) days for insurers to
initiate loss adjustment of a property claim after notification
of loss by the insured claimant.
C. Therefore, insurers shall have a total of 60 days to
initiate loss adjustment of a property damage claim after
notification of loss by the insured claimant.
D. This declaration is based on the representation that the
additional time period is necessary due to the large volume
of claims resulting directly from Hurricane Laura and its
aftermath, and with the admonition that insurers will
promptly identify, evaluate, and resolve these claims.
Insurers must continue to provide timely service to their
insured claimants by promptly acknowledging receipt of
claims and making appropriate assignments for the
adjustment of claims.
Speak with an Insurance Claim Lawyer Today
There are a number of challenges that can arise in pursuing a business interruption claim, but an experienced attorney can help greatly. Contact Louisiana Hurricane Claims Lawyer today by scheduling an appointment online or call us to schedule a free initial consultation.
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