To Impute or Not to Impute: Independent Insurance Adjuster Liability in Louisiana

• Author: Braxton A. Duhon
• Position: J.D./D.C.L., 2021, Paul M. Hebert Law Center, Louisiana State University
• Pages: 277-324

Louisiana Law Review Louisiana Law Review

Volume 81

Number 1

Fall 2020

Article 12

12-11-2020

To Impute or Not to Impute: Independent Insurance Adjuster To Impute or Not to Impute: Independent Insurance Adjuster

Liability in Louisiana Liability in Louisiana

Braxton A. Duhon

Follow this and additional works at: https://digitalcommons.law.lsu.edu/lalrev

Repository Citation Repository Citation

Braxton A. Duhon,

To Impute or Not to Impute: Independent Insurance Adjuster Liability in Louisiana

, 81

La. L. Rev. (2020)

Available at: https://digitalcommons.law.lsu.edu/lalrev/vol81/iss1/12

This Comment is brought to you for free and open access by the Law Reviews and Journals at LSU Law Digital

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To Impute or Not to Impute: Independent Insurance

Adjuster Liability in Louisiana

Braxton A. Duhon*

TABLE OF CONTENTS

Introduction: A Disastrous Situation............................................ 272

I. Duties, and Insurance Companies, and Independent

Adjusters, Oh My!........................................................................ 276

A. Duties in General ................................................................... 277

B. Duties Under Louisiana Revised

Statutes § 22:1892 and § 22:1973.......................................... 278

C. Independent Adjusters––Generally........................................ 280

1. Majority View on Independent Adjuster Duties ............. 280

2. Minority View................................................................. 283

3. Louisiana: No Contract, No Problem.............................. 284

II. Do Independent Adjusters Owe a Duty

to Insureds Under Louisiana Law?............................................... 285

A. Insurers’ Duties Under Louisiana Revised

Statutes §§ 22:1892, 22:1973 ................................................ 286

1. Non-Delegable Duties and Where to Find Them............ 287

2. Insurers’ Duties: Non-Delegable By Analogy ................ 289

B. Do Insurance Adjusters Generally Owe a

Duty to Insureds?................................................................... 291

1. “We Don’t Need No [Delegation]”:

Another Brick in the Wall............................................... 292

2. Exceptions to the General Rule––Situations

in Which Adjusters Assume a Duty ................................ 295

C. Contractual Duties and Relationships.................................... 299

III. Agency Law: Should Courts Impute Liability? ........................... 301

A. Independent Adjusters vs. Employee Adjusters .................... 301

B. Agency Law and Independent Contractors............................ 302

Copyright 2020, by BRAXTON A. DUHON.

* J.D./D.C.L., 2021, Paul M. Hebert Law Center, Louisiana State University.

I would like to specially thank Michael deBarros for bringing my attention to this

topic and for his continued guidance throughout the writing process. This

Comment is dedicated to my parents, Richie and Allison Duhon, and my fiancée,

Halie Englade, for their endless love and support in all my endeavors.

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272 LOUISIANA LAW REVIEW [Vol. 81

C. Independent Here, Independent There,

Independent Everywhere? ..................................................... 304

IV. Policy Implications and the Louisiana Duty-Risk Approach....... 306

A. Duty-Risk Approach.............................................................. 306

B. Application of Policy Factors from Majority

View to Louisiana Law.......................................................... 307

C. Bad Faith Without Bad Conduct............................................ 311

V. An equitable solution ................................................................... 312

Conclusion.................................................................................... 316

INTRODUCTION: A DISASTROUS SITUATION

Louisiana is a hotbed for insurance claims because of both its high

automobile-accident rate⎯1,790 severe and fatal crashes in 20181––and

its high risk for property damage from natural disasters, such as hurricanes

and flooding.2 High rates of property and automobile damage lead to a

larger quantity of insurance claims, which in turn lead to more instances

of and claims against insurance companies for behavior that is knowing,

arbitrary, capricious, or lacking probable cause.3 Insurance companies

often rely on independent adjusters to promptly and properly investigate,

adjust, and settle insurance claims.4 Thus, the determination of whether

1. Louisiana SHSP Crash Dashboard, CTR. FOR ANALYTICS & RES. IN

TRANSP. SAFETY, http://datareports.lsu.edu/SHSPCrash.aspx (last visited June

16, 2020) (select “2018” from the year drop-down menu to view crash statistics

for 2018) [https://perma.cc/TD6L-H6TZ].

2. See Dean A. Sutherland, Insurance “Bad Faith” Law After Hurricanes:

Duties Owed by Insurance Companies and Potential Penalties for Violation of

Those Duties, 54 LA. BAR JNL. 90, 90 (2006).

3. Insurance Handbook, Spotlight On: Catastrophes -insurance issues, INS.

INFO. INST., https://www.iii.org/publications/insurance-handbook/insurance-and-

disasters/spotlight-on-catastrophes-insurance-issues (last visited Sept. 26, 2019)

[https://perma.cc/4F8C-9NEE]. Bad faith claims against insurers are those claims

providing penalties for insurers investigating and paying insurance claims in such

a way that is arbitrary, capricious, or lacking probable cause. See LA. REV. STAT.

§§ 22:1973, 22:1892 (2019).

4. See generally La Louisiane Bakery Co. v. Lafayette Ins. Co., 61 So. 3d

17 (La. Ct. App. 5th Cir. 2011) (discussing an insurance company that hired an

independent adjuster to handle wind-damage claim after Hurricane Katrina);

Leslie Scism, Irma’s Riches: $30 ,000 for a Few Days of Work, WALL STREET J.