Louisiana has acted swiftly to overturn a recent Louisiana Supreme Court decision holding that an insurer's unconditional payment on a first-party property claim interrupts prescription. Effective June 9, 2026, House Bill 1117 provides that payments made under specified first-party property policies do not acknowledge a debt or extend the contractual prescriptive period. However, beginning January 1, 2027, insurers issuing unconditional payments under the dwelling or other structures coverage of a homeowner's policy must also provide written notice advising insureds that such payments do not interrupt, suspend, or extend the applicable deadline to file suit.
Legislature Responds to Bryan
In Bryan v. Louisiana Citizens Property Insurance Corp., 2025-C-00443 (La. 3/6/26), the Louisiana Supreme Court addressed whether an unconditional payment made on a first-party property insurance claim interrupted the contractual two-year prescriptive period contained in a homeowner's policy.
Relying on Louisiana Civil Code article 3464, governing acknowledgment of debt and interruption of prescription, the Court concluded that an unconditional payment may constitute an acknowledgment sufficient to interrupt prescription. As a result, the contractual prescriptive period began running anew from the date of payment. In Bryan, the Court expressly extended that principle, previously applied in other contexts such as uninsured motorist coverage, to first-party property claims.
The decision raised significant concerns for property insurers because it created uncertainty as to when the period to file suit expired, potentially extending the period well past the anticipated deadline.
House Bill 1117 Reverses the Result
The Louisiana Legislature responded by enacting House Bill 1117, which amends La. R.S. 22:868(B). The amendment provides that an insurer's payment under specific first-party property policies shall not be considered an acknowledgment of a debt or otherwise serve to extend the contractually defined prescriptive period, which continues to run from the inception of the loss. In practical terms, the legislation legislatively overturns the Louisiana Supreme Court's holding in Bryan for these policies. After June 9, 2026, an insurer's unconditional payment alone no longer restarts the contractual period for filing suit.
New Notice Requirements for Homeowners Claims
The Legislature also added a new consumer disclosure requirement. Beginning January 1, 2027, insurers issuing unconditional payments under the dwelling or other structures coverage of a homeowner's policy may be required to provide written notice advising the claimant that the payment does not interrupt, suspend, or otherwise extend the applicable prescriptive period.
Why It Matters
House Bill 1117 seeks to restore certainty to Louisiana first-party property claims by clarifying when those claims are prescribed. The amendment allows insurers to continue making payments without concern that doing so would extend their litigation exposure.
Insurers should, however, review their claims handling procedures before January 1, 2027, to ensure payment correspondence for homeowner's claims includes the newly required statutory notice, where applicable.
Effective Dates:
- June 9, 2026: Amendment providing that insurer payments do not acknowledge a debt or extend contractual prescription became effective.
- January 1, 2027: Mandatory written notice requirement for unconditional homeowners' property payments becomes effective
