How long does my insurance company have to pay my claim?

Every insurance company is required to respond to filed claims in a “reasonable time.” Even though this term is rather vague, there is a fairly easy standard for determining whether the time taken to complete a claim is reasonable. If the insurance company intentionally delays any portion of the claims process, it is not acting upon the claim in a reasonable time.

This guideline is necessary because insurance companies have a financial incentive to delay the claims process. The longer it takes for an insurance company to pay a claim, the more likely it is that a claimant will either drop a claim or accept a lower payment offer. If the insurance company delays a claim long enough, they have effectively denied the claim without actually denying it.

Unscrupulous insurance companies will use unnecessary delays to force claimants to make bad decisions or to make it more difficult for claimants to meet deadlines. 

If you suspect your insurance company is using tactics like these against you, contact an insurance attorney at Morgan and Morgan to learn more about your legal options.

Part of the reason insurance companies can get away with delaying the claims process is that most people don’t understand how it is supposed to work. If you don’t know what the steps are or the order of those steps, it is difficult to know when things are going slower than they should. 

Typically, the insurance claims process will follow the same steps in a specific order:

Receipt of Claim

The first thing your insurance company should do after you file a claim is to acknowledge that claim. Unless you are filing a claim on a federal holiday or during a very busy period, this should happen quite quickly. Most insurance companies will acknowledge a claim within just a few hours.

If this process takes more than two business days, you should contact your insurance agent and inquire about the delay. Unless you get a very good answer, you should probably speak to an attorney if there is any further delay.

Investigation of Claim

Investigation of a claim is often the longest part of the claims process, though modern technology makes this much easier than it once was. 

For example, insurance investigators can use GPS and online maps to investigate a car accident. This is much faster than it was when investigators had to visit the scene of the accident physically.

Despite the march of technology, some investigations will likely require visual inspections or interviews, and these things still take time. It is reasonable to assume that an investigation will take a few weeks.

But even if it takes a while, you deserve to be updated regularly and receive an estimated timeline for the investigation. The more informed you are during an investigation, the less likely it is that the insurance company is intentionally delaying the process.

Acceptance or Denial of Claim

Once the investigation is complete, the insurance company should either accept the claim and offer compensation or deny the claim and provide the reasons for doing so. There is some red tape involved with this, but this decision should be reasonably quick after the investigation is complete. If you sense any delay, speak to a lawyer.

If this happens, contact your insurance company right away and demand they provide immediate payment or a date by which you will be paid. Next, speak to a lawyer to guarantee that payment happens on time.

In almost all claims, you will be paid all at once. If you have ongoing costs, your insurance company may pay you over time in installments. But this can also be a stalling tactic, so be wary.

When an insurance company owes you compensation, you should get paid as quickly as possible. This isn’t just important for helping you recover after losing property or getting injured; it is also required by law. 

If your insurance company is delaying your payment, contact Morgan and Morgan today for a free case evaluation.