Understanding Recent Insurance Reform in Louisiana: What You Need to Know

In recent years, the conversation surrounding insurance reform in Louisiana has become increasingly urgent. Policymakers, industry leaders, and residents are grappling with the need for a system that balances affordability, accessibility, and sustainability. The primary goal of these insurance reforms is to stabilize the insurance market, and several bills have recently been signed into law by Governor Landry. In this blog post, we will explore how insurance statutes are changing in Louisiana and what these changes mean for you.

The Impact of Insurance Reform on Claims Handling

At Pierce & Shows, we understand that many individuals attempt to handle their insurance claims on their own. Often, they spend months battling with their insurance company, only to become frustrated and eventually seek professional assistance. Many of these clients come to us with complaints about their insurers, feeling that their claims were mishandled, delayed, or treated unethically.

Historically, Louisiana had several statutes governing good faith claims handling, which provided various penalties and disincentives aimed at ensuring insurers honored their contractual obligations. However, recent tort reforms have significantly modified these penalty provisions. General damages are now largely eliminated, and penalty damages are more strictly defined than they were previously. Additionally, the duty of good faith for insurers has been relaxed, introducing a safe harbor provision. This means that if insurers take certain corrective actions within specified timeframes, they can rectify any issues in their claims handling.

Changes Favoring Insurers

Overall, the new legislation is designed to reduce the burdens and risks faced by insurers, potentially lowering costs. However, this shift may also impact claimants negatively, as it grants insurers more leeway in their claims processing.

Positive Changes for Claimants

Despite the advantages given to insurers, there is one significant aspect of the tort reform that benefits claimants: the extension of what Louisiana refers to as liberty of prescription, known in other states as the statute of limitations. Historically, Louisiana has had one of the shortest prescription periods in the nation. If someone caused you harm, you had to file a claim within one year of the incident or from the date you reasonably should have known about it.

With the enactment of Civil Code Article 3493.1, the prescriptive period for certain tort claims has been extended from one year to two years, effective July 1, 2024. This change applies only to accidents occurring on or after this date. Therefore, if your accident happened before July 1, 2024, you still have one year to file your claim. However, accidents occurring on or after this date will allow you two years to make a claim.

Why the Extension Matters

The reasoning behind this extension is straightforward: many individuals are unable to complete their medical treatment and physical recovery within 12 months of their accident. This extension allows them the necessary time to assess the full extent of their injuries and their impact on their lives, families, and workplaces before making a formal claim for compensation.

Get Professional Help with Your Claim

While the recent reforms have strengthened insurers in many respects, there are also provisions that can benefit certain claimants. Navigating these complex matters can be challenging. If you’ve suffered an accident through no fault of your own, we encourage you to reach out to the team at Pierce & Shows.