Why do insurance companies delay claims?
Asked by: Gwen Fahey | Last update: October 30, 2025Score: 4.5/5 (38 votes)
Why do some insurance claims take so long?
Your insurance company will investigate who's responsible for the accident, as well as whether there's coverage for the injuries, damage, or other loss you filed the claim for. A coverage investigation can take just as long or even longer than an investigation to determine liability.
Why do insurance companies delay payouts?
Insurers often delay payments to increase a claimant's financial stress, hoping this pressure will lead them to accept a lower payout. As financial burdens grow, some individuals may feel compelled to settle for less than they deserve just to resolve the situation quickly.
What is a major reason why a claims payment is delayed?
Major reasons that payers reject or delay payment on a claim include: The health plan didn't receive the claim. A CPT code is missing or incorrect. Provider and/or patient identifiers are not included.
Can I sue an insurance company for delaying a claim?
Under California Insurance Code Section 790.03, when insurers fail to act “reasonably promptly” in response to member communications regarding processing or settling claims, they could be guilty of bad faith. Having a highly skilled bad faith lawyer by your side can make a huge difference.
Bad Faith: What You Need To Know
What happens if insurance doesn't respond in 30 days?
Insurers Do Not Need to Respond to Demand Letters
However, your attorney will be ready to take action against the company if they refuse to give your claim the attention it deserves. This might be by filing a civil lawsuit against the company if they continue to handle your claim in bad faith.
How likely is an insurance company to sue you?
While subrogation allows insurance providers to pursue third parties, an insurer usually cannot sue their policyholders. However, there are certain situations where an insurer may take legal action against its policyholder.
Why is my claim taking forever?
It can take quite a while to investigate an accident, especially when it comes to determining liability for the accident. The insurance company has to collect information about the claim, review evidence, and carry out other tasks to ensure the claim is valid and make a plan for moving forward with it.
What to do if an insurance company is stalling?
- Ask the adjuster for a complete list of documents and information needed to fully evaluate your claims.
- Keep physical copies of all evidence that can support your claim.
- Follow up with the insurance company regularly.
Why are my claims taking so long to process?
Prompt pay laws require insurance companies to complete claims within a set time, averaging around 30 days. However, delays due to inaccuracies, manual tasks, and miscommunication can cause that process to take longer. The claim may undergo multiple rejections until it's correct and reaches settlement.
How can I speed up my insurance settlement?
Key Takeaways for Faster Claim Settlement
It involves understanding your insurance policy, documenting all losses and expenses, and being persistent during negotiations. One of the most effective strategies is to engage a public adjuster, such as us at Insurance Claim Recovery Support.
Why do insurance companies drag out claims?
Insurance companies may purposely drag out the claims process, hoping that policyholders will grow frustrated and accept a lower settlement or even drop the claim entirely. This may include excessive paperwork requests, slow response times, or frequent requests for additional documentation.
Why would an insurance company not want to settle?
The insurance company may choose not to settle your claim if they find proof of pre-existing injuries. As its name suggests, a pre-existing injury is a condition or injury that was present prior to the accident.
What can I do if my claim is taking too long?
- Call your insurance company. First and foremost you should give the insurance company every opportunity to fulfill your claim. ...
- Review your policy with a different agent. ...
- Request a formal denial letter. ...
- Call an experienced lawyer to sue the insurance company.
Why do insurance companies delay settlements?
To Increase Their Profits
The lower your settlement amount is, the higher the insurance company's profits will be. By dragging their feet, some insurance providers may hope that the delay just makes you more desperate for any settlement amount they offer.
Can I sue my insurance company for taking too long?
Every contract in the state of California includes an implied promise of good faith and fair dealing between the parties. Where an insurer behaves unreasonably by delaying their response to a claim, the customer may be entitled to money damages through a lawsuit if that delay caused them harm.
Why do insurance companies delay payment?
Common reasons for claim delays include extensive investigation processes, missing documentation, understaffed claims departments, and the insurer's strategic delay to maximize profits. These factors can hinder timely resolution and delay access to necessary funds for claimants. How to speed up an insurance claim?
What is a bad faith claim?
Looking for evidence that supports the insurance company's basis for denying a claim and ignoring evidence that supports the policyholder's basis for making a claim is considered bad faith. If an insurer fails to promptly reply to a policyholder's claim, that act of negligence, willful or not, is considered bad faith.
Do insurance companies have a time limit?
All states except South Carolina have rules requiring insurers to pay or deny claims within a certain time frame, usually 30, 45, or 60 days.
Why is my claims adjuster taking so long?
However, delays can occur due to various reasons such as lack of evidence, legal disputes, or the insurance company trying to minimize their payout. If you believe your personal injury claim is being wrongfully delayed, it is important to take action.
Can I sue my insurance company for emotional distress?
Yes, you can sue for emotional distress under the common law standard, but it can be hard to prove. This is because you must show that the result of your claim denial caused you pain and suffering or emotional distress. This intangible loss can be more difficult to prove than, say, the cost of medical bills.
Can I threaten my insurance company?
However, you should never threaten to harm an insurance adjuster or any employee of an insurance company.
Do insurance companies fight for you?
Unfortunately for accident victims, insurance companies fight personal injury claims to avoid paying money. It does not matter that the person was injured because of another party's negligence or wrongdoing and deserves compensation for damages. The insurance company is only interested in protecting its profit margin.