Louisiana Supreme Court Clarifies Statute of Limitations for Insurance Claims After Unconditional Payments
The Louisiana Supreme Court ruled on March 6, 2026, that an unconditional payment on a first-party property insurance claim interrupts prescription – Louisiana’s term for a statute of limitations. This ruling could extend the time policyholders have to file suit, potentially beyond the usual two-year limits.
Background
Under Louisiana law, contractual claims generally have a ten-year prescriptive period. However, Louisiana Revised Statute § 22:868(B) allows property insurance policies to limit the deadline for a policyholder to file suit against an insurer to two years from the date of the loss.
Historically, there was debate about whether these suit-limitation provisions were prescriptive (subject to interruption and suspension) or peremptive (akin to a statute of repose). Prescription can be interrupted, suspended, or renounced, while a peremptive period cannot.
In Taranto v. Louisiana Citizens Prop. Ins. Corp., the Louisiana Supreme Court held that the contractual suit-limitation provisions authorized by La. R.S. § 22:868(B) were prescriptive and subject to suspension, specifically in the context of a Hurricane Katrina class action. Despite Taranto, courts remained divided on applying its holding beyond that specific case.
Louisiana law states that prescription is interrupted when “one acknowledges the right of the person against whom he had commenced to prescribe.” This acknowledgment can be express or tacit. Courts have recognized that a tacit acknowledgment can arise from conduct leading a creditor to reasonably believe liability won’t be contested, including unconditional offers or payments.
Previously, the Louisiana Supreme Court held that an unconditional payment constitutes an acknowledgment sufficient to interrupt prescription in third-party property damage claims against a tortfeasor’s insurer. The Court later extended this principle to uninsured/underinsured motorist claims in Demma v. Auto. Club Inter-Ins. Exch. Some federal courts extended this rationale to first-party property insurance claims, but the Louisiana Supreme Court hadn’t ruled on the issue until now.
The Bryan Decision
In Bryan v. Louisiana Citizens Property Insurance Corporation, the Louisiana Supreme Court held that a suit against a property insurer filed more than two years after Hurricane Ida was timely because unconditional payments were made within those two years, interrupting prescription.
Southern Fidelity Insurance Company (SFIC) issued the policy and made at least one unconditional payment during the claim adjustment. SFIC was later declared insolvent and placed into receivership.
The policyholder, Emma Bryan, and her children – Cynthia Bryan, Aubry Bryan Jr., Aunya Bryan, and Glenda Bryan – filed suit on the two-year anniversary of Hurricane Ida, initially naming Louisiana Citizens Property Insurance Corporation as the defendant. They later amended the petition after the two-year mark to name the Louisiana Insurance Guaranty Association (LIGA) as the defendant, as LIGA assumes responsibility for claims when an insurer fails.
LIGA filed an exception of prescription, arguing the suit was untimely because neither SFIC nor LIGA were properly sued within two years of the loss. The policy stipulated that “no action can be brought against [SFIC] unless… the action is started within two years after the date of loss.”
The Bryan Court rejected LIGA’s defense, confirming that contractual suit limitation provisions are prescriptive—not peremptive—and therefore subject to interruption. The Court further held that an unconditional payment on a first-party property insurance claim interrupts prescription, finding no legal basis to exempt such claims from the principle that an unconditional payment constitutes tacit acknowledgment of a debt.
Because SFIC issued an unconditional payment within two years of the amendment to add LIGA as a defendant, the Bryan Court concluded the suit was timely. The Court emphasized that its ruling applies only to unconditional payments—those made without qualification, condition, or reservation of rights.
The Bryan Court reaffirmed that settlement payments do not interrupt prescription, nor does a partial payment made under protest pursuant to Louisiana Civil Code article 1861, which allows an obligor to pay the undisputed portion of a disputed debt.
Practical Implications
Insurers must carefully analyze each claim’s timeline to determine if a suit filed more than two years after the loss is timely, despite a valid two-year suit-limitation provision. A claim with an extended adjustment process and continued payments may not prescribe for many years after the initial two-year deadline.
The Bryan Court acknowledged concerns that the ruling may discourage unconditional payments but concluded that such policy considerations are best addressed by the legislature. Insurers should monitor potential legislative responses to this decision.
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