10.4 Resolving Claim Disputes: Appraisal, Mediation, Arbitration, Litigation & Time Limits
Key Takeaways
- Louisiana’s statutory residential appraisal clause requires each party to name an appraiser within 20 days of a written demand, with a judge appointing the umpire if the appraisers do not agree within 15 days (R.S. 22:1892(G)).
- Under Louisiana’s hurricane mediation program, an insured may request mediation of a residential property claim with disputed amounts up to $150,000 after a declared named windstorm emergency (R.S. 22:2653).
- A settlement reached in the hurricane mediation program may be rescinded by the insured within three business days unless the insured cashed or deposited the settlement check (R.S. 22:2655(12)).
- A Louisiana policy may not limit first-party property suits to less than 24 months after the inception of the loss, or other suits to less than one year from accrual (R.S. 22:868(B)).
- Louisiana delictual (tort) actions arising on or after July 1, 2024 prescribe in two years under Civil Code art. 3493.1, enacted by Acts 2024, No. 423.
Last updated: September 2026
The Escalation Ladder
Most claim disagreements end in negotiation, with the adjuster explaining the estimate, the policy basis for any denial, and what documentation would change the result. Louisiana makes it an unfair claims settlement practice to compel insureds to sue by routinely offering substantially less than amounts later recovered (R.S. 22:1964(14)(g)). When negotiation stalls, the formal remedies are:
| Remedy | What it resolves | Binding? |
|---|---|---|
| Appraisal | The amount of loss (valuation) | The award sets the amount, but coverage questions and policy terms still apply |
| Mediation | Any settlement terms the parties agree to | Voluntary and nonbinding unless a written settlement is reached and not rescinded |
| Arbitration | Issues the contract or statute submits, such as uninsured motorist damages or inter-company subrogation | Depends on the agreement; UM arbitration is optional for the insured |
| Litigation | Coverage, liability, damages and statutory penalties | Yes, subject to appeal |
Appraisal
Louisiana's Statutory Residential Appraisal Clause (R.S. 22:1892(G))
Residential property policies must contain this appraisal provision:
- If the insured and insurer fail to agree on the amount of loss, either may demand appraisal in writing.
- Each party selects a competent appraiser and names that appraiser within 20 days of receiving the demand.
- The appraisers select a competent and impartial umpire. If they have not agreed after 15 days, a judge of the court of record where the property is located appoints one.
- The appraisers appraise the loss pursuant to law. Written notice to the insurer of their agreement sets the amount of loss.
- If the appraisers do not agree within 30 days, they submit their differences and supporting documents to the umpire. Both appraisers may agree to extend that period to 60 days.
- A written agreement signed by the umpire and either party's appraiser sets the amount of loss, but it does not preclude either party from exercising its rights under the policy or the law.
- Each party pays its own appraiser; the umpire and other appraisal expenses are split equally.
- All policy terms, limits, deductibles and conditions apply to an appraisal award.
- A lawsuit filed before a demand for appraisal is held in abatement between a timely demand and the deadline for executing the award. The court may enforce the clause's deadlines, set a reasonable deadline for demanding appraisal, and require discovery on issues unrelated to the appraisal.
Standard Fire Policy Appraisal (R.S. 22:1311)
The Louisiana Standard Fire Policy appraisal condition uses a competent and disinterested appraiser for each side, named within 20 days of written demand. The appraisers select a competent and disinterested umpire. If they fail to agree on one for 15 days, a judge of a court of record selects the umpire. An itemized award agreed to by any two of the three and filed with the insurer determines actual cash value and the amount of loss.
Appraisal Guardrails
- Appraisal decides how much, not whether the loss is covered.
- A public adjuster may not serve as appraiser or umpire on a claim he adjusted (R.S. 22:1706(H)(10)).
- On catastrophic claims, tendering undisputed additional amounts within 30 days of a valid appraisal award is not by itself evidence of bad faith (R.S. 22:1892.2(D)(4)).
Mediation: Louisiana's Hurricane Mediation Program (R.S. 22:2651–2656)
| Rule | Requirement |
|---|---|
| Eligible claims | Residential property damage claims with disputed amounts up to $150,000 arising from a governor-declared state of emergency for a named windstorm, for property in the declared area. Larger disputes may be mediated if both parties agree. |
| How it starts | The insured contacts a participating mediation firm listed on the Department's website |
| Firm deadlines | Written notice to the insurer and insured within 5 business days of assignment; mediation set within 30 days of assignment |
| Session | Up to 90 minutes of actual mediation, in person in a metropolitan statistical area or remotely by agreement and advance notice |
| Cost | The insurer bears reasonable mediation costs. An insured who fails to appear pays to reschedule. |
| Insurer no-show | An insurer that fails to appear, or sends a representative without settlement authority, pays the insured's actual travel expenses up to $250 plus rescheduling costs, and may face unfair trade practices enforcement absent good cause |
| Documents | Both parties give the firm relevant documents and a short statement within 5 business days of being contacted |
| Representation | The insured may bring an attorney or other representative, identified to the mediator at least 6 days before the mediation |
| Confidentiality | Statements and documents are settlement negotiations under R.S. 9:4112 |
| Outcome | Voluntary and nonbinding. A written settlement may be rescinded within 3 business days unless the insured cashed or deposited the check. An unrescinded settlement releases the specific claims mediated, and the insurer pays within 30 days of the mediation's conclusion. |
The catastrophe claim process disclosure form insurers must send after a declared emergency explains how to use this program (R.S. 22:1898(A)(12)).
Arbitration
- Uninsured motorist claims: UM coverage may provide for arbitration, but submission is optional with the insured. It may not deprive the insured of the right to sue the insurer or deprive Louisiana courts of jurisdiction (R.S. 22:1295(5)).
- Auto fault for premium purposes: an auto insurer that uses arbitration or binding mediation to set fault, in order to raise the insured's premium, must first tell the insured the percentage of fault (R.S. 22:1892.1).
- Inter-company arbitration: insurers commonly resolve subrogation disputes between themselves through industry arbitration agreements, which keeps small subrogation claims out of court.
- Contractual arbitration in other policies is enforced according to its terms and Louisiana law.
Litigation and Time Limits
| Limit | Rule | Source |
|---|---|---|
| Policy suit-limitation clauses | A Louisiana policy may not limit suit to less than 24 months after the inception of the loss for first-party claims under the listed property classes, or less than one year from accrual for other insurance, unless the Code provides otherwise | R.S. 22:868(B) |
| Standard Fire Policy | Suit on a first-party claim must be commenced within 24 months after the inception of the loss, after complying with policy requirements | R.S. 22:1311 |
| Choice of law and forum | A Louisiana policy covering Louisiana subjects may not require construction under another state's law or deprive Louisiana courts of jurisdiction or venue, subject to limited exceptions | R.S. 22:868(A), (D) |
| Statutory penalties and fees | Claims under R.S. 22:1892(B) and 22:1892.2 prescribe in two years | R.S. 22:1892(B)(7); 22:1892.2(B)(2) |
| Tort (delictual) actions | Two years from the day injury or damage is sustained, for actions arising after July 1, 2024 (prospective only). For damage to immovable property, prescription runs from when the owner knew or should have known of the damage. | Civil Code art. 3493.1 (Acts 2024, No. 423) |
| Personal actions | Generally 10 years, unless legislation provides otherwise, which is why policy provisions permitted by R.S. 22:868 often control contract suits | Civil Code art. 3499 |
| Catastrophic immovable property penalty suits | A 60-day cure period notice is a condition precedent, and notice sent in the last 90 days before prescription suspends it | R.S. 22:1892.2(C) |
Adjuster practice points:
- Never misrepresent a prescriptive period to a claimant. Doing so knowingly breaches the insurer's good-faith duty (R.S. 22:1892(I)(2)(d)).
- Once suit is filed, route communications through counsel. Remember that suing the insured interrupts prescription against the insured's liability insurers (R.S. 22:1269(B)(3)).
- Preserve evidence and document the claim file as if it will be read in court.
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Test Your Knowledge
An insured makes a written appraisal demand under Louisiana’s statutory residential appraisal clause, and the two appraisers cannot agree on an umpire. What happens after 15 days?
A
B
C
D
Test Your Knowledge
Which claim qualifies for Louisiana’s hurricane mediation program at the insured’s request?
A
B
C
D
Test Your Knowledge
An insured signs a written settlement at a hurricane mediation conference but has not cashed the check. What right does R.S. 22:2655(12) give the insured?
A
B
C
D
Test Your Knowledge
What is the shortest suit-limitation period a Louisiana property policy may impose on a first-party claim under R.S. 22:868(B)?
A
B
C
D