Claims Handling and Adjusting Practices
Claims handling is a sequence, and questions test whether you know the sequence and the documentation each step requires: notice/FNOL → acknowledgment and contact → investigation → coverage analysis → damage evaluation → reservation of rights or denial → negotiation → payment → subrogation and salvage → closure. Two duties run in parallel: the insurer's duty of good faith and fair dealing, and the insured's contractual duties after loss (prompt notice, proof of loss, examination under oath, records, mitigation, protection of property from further damage).
Coverage first, damages second. Confirm the policy was in force, the loss falls inside an insuring agreement, no exclusion applies, and conditions were satisfied. When coverage is genuinely doubtful, issue a written reservation of rights; do not let a nonwaiver letter substitute for a timely coverage decision. The duty to defend is broader than the duty to indemnify and is triggered by allegations potentially within coverage.
Louisiana timing: first-party property claims are payable within 30 days after the insurer receives satisfactory written proof of loss (La. R.S. 22:1892); arbitrary or capricious delay can add penalties and attorney fees, and bad-faith conduct is separately actionable under La. R.S. 22:1973.
Traps: giving verbal coverage opinions, failing to document noncooperation, paying a mortgagee or lienholder without resolving competing interests, and releasing a liability claim in a way that unintentionally destroys the insured's UM claim.
Worked rule: Louisiana is a pure comparative fault state (La. C.C. art. 2323). Damages $50,000, claimant 20% at fault, tortfeasor limit $25,000: recovery is $50,000 × 80% = $40,000; the liability policy pays its $25,000 limit and UM may respond to the $15,000 gap if UM coverage exists.