Under Louisiana law, uninsured/underinsured (“UM”) insurers are under strict requirements to issue “good faith” unconditional tenders of the undisputed portion of the plaintiff’s damages. These unconditional tenders are not contingent on the final disposition of the case, rather they must be paid up front and cannot be recovered in the event of a lower judgment or settlement after the fact. The amount that is required is only that which is “undisputed”, meaning that amount which the insurer does not reasonably dispute is owed to the plaintiff. When an insurer receives “satisfactory proof of loss”, it is then under a requirement to issue an unconditional tender within 30 or 60 days. However, if the insurer has knowledge of a plaintiff’s pre-existing injuries/conditions that warrant a reasonable investigation, then the insurer can rely on those injuries to delay payment while it investigates the condition, or to withhold payment altogether (if warranted) without being subject to the penalties imposed by the statutes.
The current statutory bases for these requirements come from Louisiana Revised Statute § 22:1892(A)(1) and § 22:1973. These statutes “prohibit “virtually identical” conduct, and the primary difference between them is the time period allowed for payment.” Whereas § 22:1892(A)(1) allows the insurer 30 days to issue payment, § 22:1973 allows the insurer 60 days.
Louisiana Revised Statutes 22:1892(A)(1) requires all insurers to pay the amount of any claim due any insured within thirty days after receipt of satisfactory proofs of loss. Louisiana’s First Circuit Court of Appeal restates the requirement as follows:
Failure to make such payment within thirty days after receipt of such satisfactory written proofs and demand therefor …, when such failure is found to be arbitrary, capricious, or without probable cause, shall subject the insurer to a penalty, in addition to the amount of the loss, of fifty percent damages on the amount found to be due from the insurer to the insured, or one thousand dollars, whichever is greater, payable to the insured, … or in the event a partial payment or tender has been made, fifty percent of the difference between the amount paid or tendered and the amount found to be due as well as reasonable attorney fees and costs.
However, Revised Statute § 22:1973 requires payment “within sixty days after receipt of satisfactory proof of loss from the claimant”. Breach of this statute will subject the insurer to penalties: “in an amount not to exceed two times the damages sustained or five thousand dollars, whichever is greater” only “when such failure is arbitrary, capricious, or without probable cause.”
So, failure to tender within 30 days will subject the insurer to a penalty in the amount of an additional 50% of the total amount later found to be owed as well as reasonable costs and attorney’s fees. However, failure to tender within 60 days will subject the insurer to a greater amount which is not to exceed two times the amount of damages sustained.
Note that “[b]oth statutes are penal in nature and must be strictly construed.” Louisiana law requires that statutes authorizing punitive damages be interpreted subject to strict construction. Thus, as a statute authorizing penal damages, Louisiana Revised Statutes 22:1892(A)(1) is strictly construed, and “this statute is applicable to a UIM claim.” 
However, these statutes only require that an insurer pay amounts due after a satisfactory proof of loss. The Louisiana Supreme Court held in McDill v. Utica Mut. Ins. Co. that an insurer must tender an amount that is not in dispute only when the insurer has received sufficient facts that fully apprise the insurer (1) the owner or operator of the other vehicle involved in the accident was uninsured or underinsured; (2) that he was at fault; (3) that such fault gave rise to damages; and (4) establish the extent of those damages. In other words, the insurer cannot delay payment until it has acquired satisfactory proof of the exact and entire extent of the loss. Rather, whenever a portion of the amount due becomes proven beyond dispute the insurer must pay at least that portion (the amount “not in dispute”). If the insured proves these things (or if the insurer receives such proof from a different source), then “the insurer cannot stonewall the insured because the insured is unable to prove the exact extent of his general damages.” The insurer is required to tender this amount “to show their good faith in the matter and to comply with the duties imposed upon them under their contract of insurance with the insured. The amount that is due would be a figure over which reasonable minds could not differ.”
The elements listed above are referred to as “satisfactory proof of loss”, and in order to recover penalties, the plaintiff is required to show both that the insurer received such satisfactory proof of loss and failed to pay the undisputed amount within 30 or 60 days, but also that the insurer’s failure to pay was conducted arbitrarily, capriciously, or without probable cause.
An insured who claims penalties and attorney’s fees under this statute has the burden of proving that the insurer received a “satisfactory proof of loss” as a necessary predicate to a showing that the insurer was arbitrary, capricious, or without probable cause. Id., 437 So.2d at 827–828.
In this context, arbitrary and capricious means that the insurer did not have a reasonable basis for rejecting or delaying payment. Reed v. State Farm Mut. Auto. Ins. Co.,
The sanctions of penalties and attorney fees are not assessed unless a plaintiff’s proof is clear that the insurer was in fact arbitrary, capricious, or without probable cause in refusing to pay. Block v. St. Paul Fire & Marine Ins. Co., 32,306, p. 7 (La.App. 2 Cir. 9/22/99), 742 So.2d 746, 751. The statutory penalties are inappropriate when the insurer has a reasonable basis to defend the claim and acts in good-faith reliance on that defense. Rudloff v. Louisiana Health Services and Indemnity Co., 385 So.2d 767, 771 (La.1980), on rehearing. Especially when there is a reasonable and legitimate question as to the extent and causation of a claim, bad faith should not be inferred from an insurer’s failure to pay within the statutory time limits when such reasonable doubts exist. Block, 32,306 at 8, 742 So.2d at 752. (emphasis added).
Thus, if the insurer has reasonable grounds for rejecting a claim, the plaintiff cannot recover penalties.
For example, investigation of a pre-existing injury affords the insurer a reasonable basis for delaying tender. In Reed v. State Farm Mut. Auto. Ins. Co., the Louisiana Supreme Court found that the UM insurer provided a reasonable timetable of as long as 15 months for tendering payment, and its decision to delay tender was not arbitrary and capricious due to concerns surrounding Plaintiff’s pre-existing medical history. “Thus, the fact that State Farm subsequently tendered the full UM limits is immaterial; State Farm presented a reasonable defense for the timetable in which it tendered payment.”
The question of how long the insurer can delay/withhold payment is ultimately a question of reasonableness and depends on the nature of the investigation and timeline in which it delayed/denied payment.
In Duncan v. Allstate Insurance Company, the insurer was reasonable to delay unconditional tender by approximately 7 months after questioning medical causation due to Plaintiff’s pre-existing medical history.
Additionally, in Carey v. Thomas, the insurer originally paid approximately $500 in medical bills for the Plaintiff’s treatment. The insurer then requested additional medical documentation for the Plaintiff’s claim. Plaintiff attempted to argue that the defendant’s failure to pay the clam was arbitrary and capricious. However, the court held that the insurer’s decision was not in bad faith as it was waiting on additional documentation from the insured.
Although a plaintiff is not required to prove to the insurer the exact extent of his damages in order to have provided an adequate proof of loss, it is also not enough for the plaintiff merely to show that he has in all likelihood suffered some damages. For the Plaintiff to succeed he must show that the insurer has received enough information for the insurer (not the plaintiff) to make a judgment on the extent of damages.
Thus, the issue in the instant case, as it was in McDill, is whether the insurer received satisfactory proof of loss; specifically, both cases address whether the insured “fully apprised” the insurer of the extent of damages occasioned by the accident. After an insurer receives notice of the claim, the basis of the claim, and the identity of the doctors involved, in order for the insurer to avoid being arbitrary or capricious, it is necessary for the insurer to determine whether there exists a legitimate basis for not paying at least what it considers to be undisputed (emphasis added).
Especially when there is a reasonable and legitimate question as to the extent and causation of a claim, bad faith should not be inferred from an insurer’s failure to pay within the statutory time limits when such reasonable doubts exist. In those instances where there are substantial, reasonable, and legitimate questions as to the extent of an insurer’s liability or an insured’s loss, failure to pay within the statutory time period is not arbitrary, capricious or without probable cause.
This distinction is important because the plaintiff may attempt to argue that he (the plaintiff) is not required to prove the “exact” extent of his damages (which is true). However, this is insufficient. The plaintiff may not be required to prove this to an exact number, but the plaintiff must at least give the insurer enough information to make a specific determination for itself.
Note also that an insurer is not required to be satisfied by the mere allegations and contentions as represented by the Plaintiff in determining whether satisfactory proof of loss has been obtained. “A claimant’s mere contention that he has suffered a loss is not sufficient to meet the burden of showing a satisfactory proof of loss” Rather, an insurer is entitled to investigate claims and perform its own analysis.
Thus, although insurer is under a strict timeline for the unconditional tender of damages, it is not required to issue an unconditional tender before engaging in a reasonable investigation of a plaintiff’s pre-existing conditions. If the plaintiff’s pre-existing conditions warrant an investigation, then the insurer is not “arbitrary, capricious, or without probable cause” in delaying/denying payment based on these facts, and penalties are not applicable.
 McDill v. Utica Mut. Ins. Co., 475 So. 2d 1085 (La. 1985).
 Cazenave v. Anpac Louisiana Ins. Co., No. CV 16-1420, 2016 WL 7368414, at *4 (E.D. La. Dec. 20, 2016).
 Richardson v. GEICO Indem. Co., 2010-0208 (La. App. 1 Cir. 9/10/10).
 Reed, 857 So.2d at 1020. Lemoine v. Mike Munna, L.L.C., 2013-2187 (La. App. 1 Cir. 6/6/14), 148 So. 3d 205, 215.
 “Furthermore, when a statute does authorize the imposition of punitive damages, it is subject to strict construction. International Harvester Credit, 518 So.2d at 1041; State v. Peacock, 461 So.2d 1040, 1044 (La.1984).” Ross v. Conoco, Inc., 2002-0299 (La. 10/15/02), 828 So. 2d 546, 555.
 “This statute must be strictly construed because it is penal in nature.” Richardson v. GEICO Indem. Co., 2010-0208 (La. App. 1 Cir. 9/10/10), 48 So. 3d 307, 314. Citing Hart v. Allstate Ins. Co., 437 So.2d 823, 827 (La.1983).
 Richardson v. GEICO Indem. Co., 2010-0208 (La. App. 1 Cir. 9/10/10), 48 So. 3d 307, 314.
 475 So. 2d 1085, 1089 (La. 1985).
 McDill v. Utica Mut. Ins. Co., 475 So. 2d 1085, 1091 (La. 1985).
 Richardson v. GEICO Indem. Co., 2010-0208 (La. App. 1 Cir. 9/10/10), 48 So. 3d 307, 314.
 2003-0107 (La. 10/21/03), 857 So. 2d 1012, 1021.
 “An insurance carrier must make an attempt to determine the reasonableness of a demand made upon it and the reasonableness of the amount demanded. If an insurance company has reasonable grounds for refusing to pay a claim made under a policy for uninsured motorist coverage, it will not be held liable at a later date for penalties if it is determined that the amount demanded is due and owing under an uninsured motorist policy.” Pitard v. Davis, 599 So. 2d 398, 403 (La. Ct. App. 1992).
 2003-0107 (La. 10/21/03), 857 So. 2d 1012, 1023–24.
 Reed v. State Farm Mut. Auto. Ins. Co., 2003-0107 (La. 10/21/03), 857 So. 2d 1012, 1023–24.
 01–840, pp. 8–9 (La.App. 5 Cir. 12/26/01), 803 So.2d 420, 425.
 603 So. 2d 263 (La. Ct. App. 1992).
 Reed v. State Farm Mut. Auto. Ins. Co., 2003-0107 (La. 10/21/03), 857 So. 2d 1012, 1022.
 Lemoine v. Mike Munna, L.L.C., 2013-2187 (La. App. 1 Cir. 6/6/14), 148 So. 3d 205, 21.
 The plaintiff is not under a strict requirement to provide this information to the insurer, if the insurer obtains this information on its own or through another source, that will be sufficient to begin the clock.
 Marie v. John Deere Ins. Co., 1996-1288 (La.App. 1 Cir. 3/27/97) 691 So.2d 1327.