Our client’s home was damaged by Hurricanes Laura and Delta, the back-to-back 2020 storms that devastated the Lake Charles area. She did what she was supposed to do and filed a claim with her insurance.
Her insurance company severely underpaid her.
This is a story countless Louisiana families know firsthand. The carrier does not deny the claim outright. It simply pays far less than the damage costs to repair, and hopes the policyholder accepts it, gives up, or cannot afford to fight. For an elderly homeowner trying to rebuild after two hurricanes, that pressure is enormous.
The Townsley Law Firm took the fight to the carrier and made it pay the full amount owed. The recovery of over $750,000 included 100% of the damages, plus penalties and attorney fees, because Louisiana law punishes insurers that fail to pay what they owe.
Underpayment Is How Insurers Deny Claims Without Saying No
Outright denial is the obvious way an insurer avoids paying. Underpayment is the quieter one, and after a major storm it is a common tactic insurance companies use to avoid paying people what they are owed.
An adjuster inspects the property and produces an estimate that does not reflect the true scope or cost of the damage. Repairs are missed, and prices are set below what local contractors actually charge. Damage is attributed to wear and tear or to a cause the policy excludes. The result is a check that falls far short of what it would take to make the homeowner whole.
Many policyholders assume the insurer’s number is the final word, but that is a common misconception. A homeowner has the right to challenge an inadequate estimate, to document the full scope of damage through independent inspection, and to hold the carrier to the coverage the policy is supposed to provide. The gap between what an insurer offers and what a claim is truly worth can be very large and closing that gap is often the entire value of a case.
Louisiana Law Punishes Insurers That Act in Bad Faith
Louisiana does not treat an insurer’s obligation to its policyholders as optional. State law imposes duties of good faith and fair dealing on insurance companies and provides real financial consequences when they fail to pay what they owe within the timeframes the law requires.
When an insurer fails to pay a satisfactorily proven claim within the statutory deadline, or acts arbitrarily and without reasonable cause, Louisiana’s bad-faith statutes allow a policyholder to recover more than just the amount originally owed. The homeowner can also recover statutory penalties and, in appropriate cases, attorney fees. That is exactly what happened here: the carrier was made to pay 100% of the damages and then penalties and attorney fees beyond that.
These penalty provisions exist to change the math for insurers. Without them, a carrier could underpay every claim knowing that only a fraction of policyholders would push back and lose nothing more than the amount it should have paid in the first place. The penalties are what make it costly for an insurer to gamble on a policyholder giving up.
Why Storm Claims Get Underpaid So Often
The Lake Charles area’s experience after Laura and Delta showed the pattern at scale. When a catastrophic storm generates tens of thousands of claims at once, insurers face enormous financial exposure, and the incentive to control payouts is intense.
Several factors drive underpayment in that environment. Adjusters, often brought in from out of state and handling overwhelming volume, may inspect quickly and miss damage. Estimating software can default to prices below the local cost of labor and materials, especially when demand for contractors spikes after a disaster. Complex damage, such as issues that develop over time or that require an expert to properly assess, gets overlooked. Carriers know that exhausted, displaced homeowners are under pressure to take whatever is offered and move on, so they take advantage when they see an opportunity.
None of that relieves an insurer of its obligation to pay a covered claim in full. It simply means policyholders often must insist on it, with documentation and, when necessary, legal pressure.
