Louisiana Injury Lawyer Blog
Because of a liability insurer’s obligation to its insured not to arbitrarily refuse reasonable offers of settlement within policy limits when faced with liability in excess of the policy limits, a liability insurer faced with multiple claims to inadequate insurance proceeds is generally not required to prorate the proceeds, but may enter into compromise agreements with one or several claimants to the exclusion of others, even to the extent of exhausting the entire fund, as long as the compromises are reasonable and are made in good faith. Manieri v. Horace Mann Mut. Ins. Co., 350 So.2d 1247 (La.App. 4th Cir. 1977); Holtzclaw v. Falco, 355 So.2d 1279 (La. 1978); and Richard v. Southern Farm Bureau Cas. Ins. Co., 254 La. 429, 223 So.2d 858 (1969).
A different obligation is involved when multiple claims are asserted against inadequate UM policy limits. It is believed that prorata distribution should be required after all possible claims are presented. It is also believed that a UM insurer has discretion to make a reasonable distribution of the insurance proceeds in an effort to achieve substantial proration. Manieri v. Horace Mann Mut. Ins. Co., 350 So.2d 1247 (La.App. 4th Cir. 1977)