insurance company has 30 days to respond

How Long Does an Insurance Company Really Have to Respond to Your Claim?

Filing an insurance claim can be a frustrating process. You likely need the payout to cover damages or medical bills. But insurance companies don’t always respond quickly.

Many states require insurers to acknowledge claims within a set timeframe. However, acknowledgement doesn’t mean they accept liability or agree to payout. Lots of tactics further delay claim resolution.

So how long do insurance companies legally get to fully respond to your claim demand? Let’s dig into typical insurance claim timelines and your options if an insurer drags its feet.

Initial Claim Acknowledgement

Most states mandate insurers acknowledge new claims within a specified number of days. Timeframes range between 10-20 days from claim receipt.

California, Florida, New York and others require insurers to acknowledge claims within 15 days. Some states allow up to 30 days. A few have no legal timeframe.

Acknowledgement means the insurance company contacts you confirming they received the claim. It may be a simple loss notice or phone call from an adjuster.

Don’t expect the insurer to accept liability or commit to any payment in the initial acknowledgement. They simply inform you the claim submission process successfully concluded.

Reasons for State Acknowledgement Laws

Laws requiring timely claim acknowledgement benefit both policyholders and insurers.

For policyholders, acknowledgement laws:

• Confirm the insurer received your claim and will investigate your loss. You don’t need to re-submit claims or wonder if the company knows about the incident.

• Start the clock on legal claim handling deadlines. Insurers must abide by state claim investigation and resolution laws after acknowledging your claim.

• Prevent insurers from later alleging they had no knowledge of your claim if disputes arise. The acknowledgement provides legal documentation you contacted them.

For insurers, acknowledgement laws:

• Initiate claim processing protocols to begin investigating the loss incident. Early investigation leads to faster and more accurate claim determinations.

• Limit policyholders lying about reporting claims on time. Acknowledgements prove when you first contacted them about the claim.

• Allow recording of claims in the proper reporting period. Proper period reporting provides accurate data and metrics about claim trends.

Acknowledgement response times balance giving insurers sufficient initial claim review time against making policyholders wait too long wondering if their claim is in process.

But acknowledgement is only the first claim response step. What about the insurer’s liability decision and settlement offer?

Liability Decision and Payment Timeframes

Unlike acknowledgement, most states don’t mandate specific insurer deadlines for deciding claim liability and making payment.

Insurers have flexibility investigating claims and determining fault and damages owed. Some complex claims require months to properly evaluate.

However, insurers can’t delay claim determination indefinitely. State unfair claims handling laws impose a “reasonable timeframe” standard for claim decisions and payment.

Exactly what qualifies as reasonable depends on factors like:

• Type of claim

• Damage extent

• Need for outside experts

• Availability of documentation

• Level of liability dispute

Adjusters consider these factors when estimating resolution timeframes. Typical insurance claim decision times fall between 30-90 days from acknowledgement. Highly complex claims may take over 90 days.

Policyholders can reasonably expect an insurer liability decision and settlement offer or denial within 90 days of acknowledgement for a straightforward claim.

Take a home fire damage claim with clear liability and damage evidence. The insurer likely needs 30 days or less to decide the claim and make a payment or denial recommendation.

Now consider a commercial general liability claim after someone slipped on a business’s wet floor. The insurer may need 90 days or more to complete investigation, determine fault percentages, and calculate damages.

An insurer that takes 6-12 months to resolve a straightforward claim likely violates state unfair claims handling laws. Policyholders have legal recourse if unreasonable delays occur.

Why Insurers Delay Claims

Given state prompt payment regulations, why do some insurers stall claims? Mainly to reduce costs and force lower settlements.

Common insurer delay tactics include:

• Asking for unnecessary documentation – Insurers request irrelevant records and forms wasting your time.

• Conducting excessive claimant interviews – Unneeded claimant questioning bogs down the process.

• Obtaining duplicate records – Demanding multiple copies of the same documents causes delays.

• Misplacing submitted documents – When documents get “lost”, you must resend them.

• Interpreting “gray area” policy provisions in their favor – Debatable policy terms almost always get interpreted to the insurer’s benefit.

• Referring claims for unnecessary fraud investigations – Allegations of potential fraud often lack merit but adds months of delays.

• Requiring you obtain multiple repair estimates – More estimates mean you wait longer for approval to start repairs.

• Disputing amount or scope of damages – Insurers argue over dollars, repair types, and material quality.

• Assigning claims to multiple adjusters – When new adjusters takeover, they re-start the process.

While some claim scrutiny ensures proper liability decisions and payment, excessive insurer claim investigation crosses into unreasonable delay territory.

Options for Dealing With Claim Delays

If an insurer unreasonably delays your claim, consider these options to spur faster resolution:

• Send a complaint letter detailing how the insurer’s handling violates state claim regulations. Cite specific legal provisions violated if possible. Insurers don’t like written complaints on file about claim delays.

• Contact your state insurance department if the insurer ignores your complaint letter. Insurance regulators pressure insurers to resolve complaints brought to their attention.

• Consult a policyholder attorney experienced with bad faith claims. Insurers know attorneys level the playing field and won’t tolerate egregious delays.

• File a lawsuit against the insurer. Nothing catches an insurer’s attention like a claim delay lawsuit seeking extra-contractual damages for legal violations.

Reasonable delays to fully investigate claims are understandable. But excessive delays as a cost containment strategy often cross legal boundaries. Don’t allow an insurer to string you along with no end in sight. Take action to hold them accountable.

Strategies for Preventing Claim Delays

Avoiding claim delays starts when you first buy coverage, not when you have a loss. These tips promote faster claim resolution:

• Select insurers with reputations for efficient, fair claim handling. Ask agents for insurer claim statistics.

• Buy coverage from insurers with local adjusters. Local presence means easier in-personmeetings and site inspections to move claims along.

• Work with an agent familiar with your type of business or insurance needs. Experienced agents help you avoid coverage gaps leading to claim disputes.

• Read your policy! Understand what’s covered, exclusions, deductibles, and claim reporting duties. Ignorance of policy terms often hinders prompt claim resolution.

• Document losses immediately. Take photos/videos of damage right away. Get contact info of witnesses onsite. Insurers need prompt, thorough claim documentation.

• Avoid making needless claims for small losses. Too many petty claims lead insurers to scrutinize all your claims more. Make claims only when justified.

• Provide requested claim documentation ASAP. Dragging your feet getting the insurer records gives them an excuse to delay.

• Be reasonable with repair/replacement demands. Inflated demands motivate insurer delays while they seek cost verification.

• Stay calm and businesslike with the adjuster. Contentious behavior encourages adjusters
  to find ways to deny or delay claims.

• If needed repairs exceed policy limits, be ready to pay the difference. Arguing with the insurer to cover above-limit costs stalls the process.

Following these guidelines helps minimize insurer claim delays, leading to faster compensation.

The Bottom Line

Most states require insurers acknowledge new claims within 10-15 days but don’t mandate liability and payment timeframes.

However, insurers should make good faith claim determinations and reasonable settlement offers or denials within 30-90 days on straightforward claims.

Unreasonable insurer claim delays violate most state’s unfair claim handling laws. Policyholders have legal options to pursue if excessive delays occur.

Preventing claim delays starts when purchasing coverage, not after a loss. Understand your policy, document thoroughly, and cooperate reasonably during the process.

While some claim investigation takes time, don’t let insurers take advantage by delaying resolution for no valid reason. Know your claim handling rights and hold them accountable.