Insurance providers are required to process claims in a timely manner, but delays can still happen for various reasons. The length of time an insurer can delay a claim depends on state laws, the complexity of the claim, and whether the insurer is acting in good faith.
Legal Time Limits for Claim Processing
Each state has regulations on how long an insurance company can take to process a claim. In Texas, for example:
- Acknowledgment Deadline: Insurers must acknowledge a claim within 15 days of receiving it.
- Decision Deadline: The insurer must approve or deny the claim within 15 business days after receiving all necessary documentation.
- Payment Deadline: If approved, the insurance company must pay the claim within five business days.
Other states may have different timelines, but most require insurers to handle claims within a reasonable period.
Common Reasons for Claim Delays
Insurance companies may delay claims due to the following:
- Incomplete Documentation: Missing paperwork or unclear evidence can slow down processing.
- Claim Complexity: Large claims, fraud investigations, or disputed liability may take longer.
- Backlogged Claims: High claim volumes, such as after natural disasters, can cause delays.
- Bad Faith Delays: Some insurers intentionally delay payments to pressure claimants into accepting lower settlements.
What to Do If Your Claim Is Delayed
If your insurance claim is taking too long, consider these steps:
- Follow Up Regularly: Contact your insurer for status updates and document all communications.
- Submit All Required Documents: Ensure the insurer has everything needed to process the claim.
- Request a Written Explanation: Ask for a formal reason for the delay.
- File a Complaint: Report the delay to your state’s insurance regulatory agency.
- Hire an Attorney: If the insurer is acting in bad faith, legal action may be necessary.
When Delays Become Bad Faith Practices
An insurer may be acting in bad faith if they:
- Repeatedly ask for unnecessary documents.
- Fail to investigate a claim within a reasonable time.
- Offer unreasonably low settlements without justification.
Conclusion
Although insurance companies are legally obliged to handle claims quickly, delays can arise for either good or bad faith reasons. Knowing the legislation in your state and acting early on will help to expedite things. If a delay seems unreasonable, one could need legal help.