Insurance companies sometimes seek out ways to deny a claim even if the person making the claim is entitled to be paid. Sometimes, even when they pay, insurance companies delay an excessively long time in doing so. Such an excessive delay was the basis of an Ascension Parish man’s lawsuit against his auto insurer. The man lost his case, though, after a trial court and the Louisiana Court of Appeal decided that the insurance company’s payment was made in a timely manner, even though the man’s lawyer did not receive the insurance company’s check until three days after the deadline imposed by the Louisiana Statutes.
The case arose from a 2010 auto accident involving Beau Schexnaildre and Nathan Spicer. Spicer was at fault, and the two sides eventually settled Schexnaildre’s claim through Spicer’s insurance. After that resolution, Schexnaildre also sought payment from his own insurance company, State Farm Mutual Automobile Insurance Co., under the terms of his underinsured motorist coverage. Thirty-three days after Schexnaildre made his claim, his lawyer received a check from State Farm for $25,000, the limit of the man’s underinsured motorist coverage.
Despite this payment, the driver sued his insurer. State Farm, the man contended, was obliged to pay him within 30 days of his sending the company proof of his damages. The insurer argued that, despite the delay, it was still in compliance, since it put the check to Schexnaildre in the mail on day 30, even if his lawyer did not get it until day 33. The driver contended that the relevant statute, Louisiana Revised Statutes Section 22:1892, requires receipt, not placement in the mail.
The trial court agreed with with State Farm that merely mailing payment within 30 days satisfied Section 22:1892. Once the insurer produced multiple affidavits stating that the check went in the mail on day 30, the trial court decided that there was no factual dispute remaining about State Farm’s compliance with Section 22:1892 and issued summary judgment in the insurer’s favor.
Schexnaildre appealed but lost. The court looked at the cases both sides cited and found that all of them involved slightly different issues from the one in Schexnaildre’s case. After reviewing and analyzing the statute, the appeals court decided that State Farm’s interpretation of the law was the correct one.
Section 22:1892 was designed to prevent insurers from acting in bad faith by excessively delaying the denial or payment of insureds’ claims. The statute was intended to provide insurance companies with a uniform period of time to review a claim, to make a decision on the claim, and to pay the claim or to notify the insured of a denial of coverage. The only date that the insurer controlled was the date of mailing. Delivery dates could vary dramatically based upon forces outside the insurance company’s control. Based upon that, the court determined that the only interpretation of the law that created a uniform timeframe for paying or denying claims was to rule in favor of State Farm, meaning that insurers have 30 days to act and to put a check or a letter in the mail.
Insurers may use many techniques to avoid or delay paying claims to their customers. Some tactics may be legal, and others are not. If you’re getting the “run around” from an insurance company following your auto accident, you need a strong advocate on your side. The hardworking and determined Louisiana car accident attorneys at the Cardone Law Firm are here to help you seek the compensation to which you’re legally entitled.
For your confidential consultation, contact us online or phone Cardone at 504-522-3333.
More Blog Posts:
Supreme Court Rules that Unintentional Spoliation of Evidence is Not a Cause of Action in Louisiana, Louisiana Injury Lawyers Blog, Sept. 15, 2015
Using Uninsured Motorist Coverage to Collect in Auto Accident Injury or Death Cases, Louisiana Injury Lawyers Blog, Feb. 2, 2015