Have you ever felt like your insurance company was taking way too long to handle your claim? You filed that claim ages ago, submitted all the required paperwork, and followed up more times than you can count. But they keep stalling, asking for more information, or telling you to just be patient a little longer. It’s beyond frustrating. You need that money to repair the damage, pay your medical bills, or replace your stolen items.
At this point, you’re about ready to call a lawyer to force them to pay up. But can you actually sue an insurance provider just for taking a ridiculously long time on your claim? Let’s dig into the options you have if you think your insurer delay tactics have gone too far.
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How Long Is Too Long for an Insurance Claim?
When you file an insurance claim, you expect it to be handled promptly. But unfortunately, insurance companies don’t always move quickly. As a policyholder, you have certain rights regarding how long an insurance company can take to process your claim.
A Reasonable Timeframe
Most states require insurance companies to act on claims within a “reasonable” timeframe, typically 30 to 60 days from when you file the claim. If it’s been over two months and your claim is still pending, that’s probably too long. The insurance company should at minimum provide you updates on the status and reasons for any delays. Lack of communication is unacceptable.
Factors That Can Delay a Claim
Of course, some claims may legitimately take longer to process due to circumstances outside the insurance company’s control. Things like:
- The severity or complexity of the claim. Major claims like those involving injuries or property damage can take longer to evaluate.
- Difficulty obtaining records or other documentation. If the insurance company needs additional records from third parties, it may add weeks or months to the process. • Workload and staffing issues. Unfortunately, some insurance companies simply don’t have enough adjusters and staff to handle the volume of claims in a timely manner.
- Requests for more information. The insurance company may need additional details or documentation from you before they can finish processing your claim. Be prepared for follow up questions and requests.
When to Take Action
If it’s been an unreasonable amount of time and your insurance company is not communicative or cooperative, you may need to take action. Some steps you can take include:
- File a complaint with your state insurance commissioner. They can investigate the delays and require the insurance company to respond.
- Contact an insurance attorney regarding your legal options. In some cases, you may be able to recover damages related to the delays.
- Issue a formal letter to the insurance company demanding action within a specific timeframe, such as 14 days. Let them know further delays will not be tolerated.
- Contact your state consumer protection agency. They may be able to apply pressure to the insurance company on your behalf.
- Change insurance companies. As a last resort, you may need to cancel your policy and take your business elsewhere. Let the insurance company know their poor service and delays cost them your business.
No policyholder should have to wait indefinitely for their legitimate claims to be processed. Make sure you understand your rights and hold your insurance company accountable if needed. The squeaky wheel gets the grease, so don’t hesitate to speak up if your claim has been pending for too long.
What Laws Protect Policyholders Against Delayed Claims?
Several laws aim to protect insurance policyholders from unreasonable delays in claims processing. These laws allow you to take legal action against insurance companies that drag their feet or wrongly deny valid claims.
Unfair Claims Settlement Practices Act
Most states have adopted the Unfair Claims Settlement Practices Act, which prohibits insurers from unfairly delaying or denying claims. If your insurance company violates these rules, you may be able to sue them under your state’s act. For example, if they fail to promptly investigate your claim or take too long to approve or deny your claim, that could be considered an unfair practice.
Bad Faith Laws
Some states allow policyholders to sue insurance companies for acting in “bad faith.” This means the company unreasonably delayed or denied your claim, often due to a desire to hold onto your premiums or discourage you from filing future claims. Bad faith lawsuits can result in additional damages beyond what you’re owed under your policy.
Statutes of Limitations
Each state has laws setting time limits, known as statutes of limitations, for filing various types of lawsuits. For claims against insurance companies, these limits typically range from 2 to 6 years. If your insurance company drags its feet for too long, you risk losing your ability to sue them over the delayed claim. However, in some cases the time limit may not start running until you receive a final denial of your claim.
To protect your rights as a policyholder, you should document all communication with your insurance company regarding your claim. Track any delays or failures to respond, and consider consulting with an insurance lawyer regarding potential bad faith or unfair claims practices. While you hope you’ll never need to take legal action against your insurer, knowing your rights under the law can help motivate them to handle your claim properly and promptly.
Steps to Take Before Sue Your Insurance Company
Review your policy documents
The first step is to gather and thoroughly review your insurance policy documents. Double check that the coverage you think you have is actually part of your policy. Insurance policies can be complicated, so take your time to understand exactly what is covered. If you find your claim is not covered under the terms of your policy, you typically do not have grounds to sue your insurance company.
File a formal complaint
If you believe your insurance company has violated the terms of your policy or state insurance laws, file a formal written complaint. Send your complaint to your insurance company’s complaint department, as well as your state insurance regulator. Provide details about your claim, communication with your insurance company, and why you believe they are acting improperly. The complaint process may resolve the issue, and the records will also be useful if you do proceed to file a lawsuit.
Demand a settlement
Before going to court, have a lawyer draft a demand letter to your insurance company. The letter should outline your complaint, the damages you have incurred, and the settlement amount you are demanding. There is a chance your insurance company may settle to avoid a lawsuit. If they deny your demand, you at least have an official record of attempting resolution before pursuing legal action.
Find an insurance litigation lawyer
If the above steps do not resolve your complaint, you will need to find an attorney experienced in suing insurance companies. Explain your situation in detail and provide copies of all correspondence and policy documents. An attorney can determine if you have grounds for a lawsuit and the merits of your case. They can then represent you through the litigation process, filing a lawsuit against your insurance company in court.
Suing an insurance company is often an uphill battle, but if you believe they have acted wrongly and caused you damages, pursuing legal action may be necessary to hold them accountable. By following these steps before filing a lawsuit, you build a strong case and have the best chance of success. Stay organized, do your research, and don’t back down if you are truly in the right.
How to File a Lawsuit Against Your Insurance Provider
So you’ve finally had enough of your insurance company dragging their feet or denying your legitimate claims. Don’t feel powerless-you have the right to take action against them in court. Here are the steps to file a lawsuit:
First, gather evidence of how your insurance provider failed you. This could include denial letters, correspondence showing delays, proof of payments made, etc. The more documentation the better. You’ll need this to build your case.
Next, determine what exactly you want to sue for. Common reasons include:
- Breach of contract: They failed to provide coverage you paid for.
- Bad faith: They unreasonably denied or delayed claims.
Fraud: They misled you or lied about policy terms or coverage.
Then, consult with an attorney who specializes in insurance litigation. They can review your case, help determine if you have grounds to sue, and file the necessary paperwork. Lawsuits against insurance companies can be complex, so hiring a lawyer is recommended. Once you have an attorney, they will draft a complaint-a legal document filed in court that initiates the lawsuit-and serve it to your insurance provider. The company will have 30-90 days to respond to the complaint. During this time, both parties go through a discovery process to obtain evidence.
Next is either a settlement or trial. Over 90% of civil cases settle before trial, so your attorney will likely try to negotiate a settlement with the insurance company first. If that fails, the case will proceed to trial. At trial, both parties present arguments and evidence to a judge and jury.
Finally, if the judgment is in your favor, the court will award you damages-compensation for losses and harm caused by the insurance company’s actions. The entire process can take months to years, so patience and persistence are important. But by standing up for your rights, you can hold your insurance provider accountable and deter similar behavior toward others.
Can You Sue an Insurance Company for Taking Too Long: FAQs
Have you been waiting months for an insurance claim to be processed? Wondering if you have any legal recourse? Here are some frequently asked questions about suing insurance companies for delays:
Can I sue my insurance company for taking too long to process a claim?
Yes, in some cases you may be able to file a lawsuit against an insurance company for unreasonable delays in processing or paying out a claim. This is known as “bad faith insurance practices.” However, insurance companies are generally given a “reasonable” amount of time to investigate and process a claim based on its complexity. As a rule of thumb, a few months for a straightforward claim is typically considered reasonable, while 6-12 months may be reasonable for a very complex claim.
What qualifies as bad faith insurance practices?
Some examples of bad faith insurance practices include:
1) Unnecessary delays: Taking months to process a simple claim with no reasonable explanation.
2) Denying a valId claim: Rejecting a claim for no valid reason or due to an unfair technicality.
3) Failing to investigate properly: Not properly looking into the details and merits of a claim before denying it.
4) Misrepresenting policy provisions: Lying about what is actually covered under an insurance policy.
5) Failing to settle within policy limits: Refusing to settle a claim even when it’s clear the policy limits will be exceeded in a lawsuit.
Conclusion
So there you have it. Dealing with insurance companies can be super frustrating, especially when you feel like they’re dragging their feet. While you technically can sue for delays, it’s usually not the best move. Your best options are to stay on them, file official complaints if needed, and only go the lawsuit route as a last resort. The goal is to get them to pay out what they owe you, not to start a long legal battle. Hopefully these tips will help you hold your insurance company accountable without having to lawyer up. Just remember to stay cool and document everything in writing. You’ve got this!
