Kitchen Fire: What Counts as Satisfactory Proof of Loss and When the Depreciation Holdback Expires
A kitchen fire damages a rented house in Baton Rouge. Replacement-cost policy: Coverage A $250,000, Coverage C $80,000, $1,000 deductible. On day 12 the adjuster inspects; on day 21 the insurer pays $6,200 actual cash value on contents and $38,000 ACV on the dwelling, withholding $9,500 of recoverable depreciation. The policy gives 180 days after the loss to repair or replace and claim the holdback. On day 205 the insured's public adjuster submits an unsigned one-page inventory saying restoration was completed on day 198, with receipts promised later. He demands the holdback plus 50% penalties and attorney fees, and threatens suit if not paid within ten days.
1. Has the 30-day payment clock started? What should the adjuster do next?
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'Satisfactory proof of loss' means enough documentation for the insurer to fully appraise and understand the claim, including the amount. An unsigned one-page inventory with receipts still to come generally does not start the clock under La. R.S. 22:1892.
- Within days, send a written, itemized request: signed proof of loss if the policy requires it, invoices, contracts, cancelled checks, and photos. State the deadline and the reason for each item.
- Log the date the complete submission arrives. That is the date the 30-day period begins.
- Neither pay an undocumented amount because penalties are threatened, nor use documentation requests to stall. If the insurer's own inspection and contractor estimates already allow it to appraise the claim, a court may treat the proof as satisfactory despite missing receipts, exposing the insurer to the 50% penalty and attorney fees.
- Note that the insured must give 30 days' written notice and an opportunity to cure before general bad-faith damages under La. R.S. 22:1973.
Put every step in the file with dates.
2. How do you handle the $9,500 recoverable depreciation given that replacement finished on day 198 and the submission arrived on day 205?
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Two questions: was the 180-day deadline met, and did the insurer cause the delay?
- On the face of the policy, replacement on day 198 and submission on day 205 fall outside the window, so the holdback is not automatically owed.
- The window can be enlarged where the insurer's own conduct caused the delay, for example a late or short ACV payment that left the insured without funds to finish. Compare the payment date to the policy's payment clause and search the file for any written or oral extension.
- The measure of the holdback is the lesser of the withheld depreciation, the amount actually and reasonably spent, and the remaining limit. Obtain proof of payment and pay promptly once it arrives.
- If denying, do it in writing: cite the provision, the dates, whether any extension is available, and the insured's right to request one. A silent denial invites a 22:1892 claim.
A request for extension filed shortly after expiration is a judgment call to escalate, not to deny reflexively.