Understanding Your Rights When Claims Are Delayed
You want quick processing when you file an insurance claim. Nonetheless, occasionally, insurers postpone payments for different reasons, which may leave you in a challenging financial position. Should your claim be unfairly postponed, knowing your rights will enable you to act appropriately. Your policy and state regulations will determine whether your insurer's failure to pay your claim within a reasonable period qualifies you for interest or penalties.
Laws Particular to States Regarding Timely Claim Payments
State-by-state insurance rules differ; several states have statutes meant to shield policyholders from unnecessary delay. Usually, these rules outline a specific window of time within which insurance companies have to accept, look at, and handle claims. States like California and Texas, for instance, mandate that carriers acknowledge a claim within 15 days and either accept or reject it within 40 days following receipt of the required paperwork. Should insurance companies ignore these deadlines, you can be entitled to interest on the postponed payments.
Insurance Negligence and Legal Action
It could be deemed "bad faith" if you believe your insurance company is purposefully postponing your claim without a good explanation. This word describes an insurer's attempt to evade its contractual responsibilities, which can be through payment delays, insufficient settlements, or denial of legitimate claims. In circumstances of bad faith, you could possibly sue your insurance to get not just the initial claim value but also further damages, including interest, fines, or even legal fees.
Penalties and Interest: Rights You Might Be Due
Some states penalize insurance companies for not honoring claims within the designated period. For states like New York and Florida, for example, insurers could be obliged to pay interest on postponed claims at rates ranging from 8% to 12% annually. Policyholders are supposed to be reimbursed for the financial load the delay causes. Furthermore, certain states can let punitive damages should the delay prove to be in bad faith.
Strategies for Self-Protection
Should your claim be delayed, act early to safeguard your interests. First, go over your policy and state rules about claim processing times. Record all of your contacts with your insurance in great detail—including emails, letters, and phone calls. To investigate your legal options, if needed, speak with an attorney focused on insurance claims. To speed up the procedure, you could also complain to the state insurance regulating body.
Conclusion
Although bad faith is not the cause of every delay, knowledge of your rights and state laws will enable you to intervene should your insurance be dragging its feet. Where you live will determine whether you are entitled to fines or interest, which could help to somewhat reduce the financial burden resulting from a delayed claim.