Why do Insurance Companies Take So Long to Pay Out?

Insurance companies may conduct an extensive investigation into an accident to determine fault and liability. This is one reason why it may take a long time for insurance companies to pay out. However, this is not the only thing that can cause payment delays.

Damage reviews, contested claims, or even unfair claim settlement practices can also cause delays. Certain unfair insurance practices are against the law in New York, per ISC § 2601. If you work with a lawyer on your case, they may be able to fight for compensation on your behalf in an insurance claim or personal injury lawsuit.

Multiple Parties Can Impact a Case’s Timeline

The number of people involved in your claim can affect how long it takes the insurer to pay out. If you are the only party involved in your claim, the company will only have one person to investigate.

However, if multiple parties were involved in your accident, the insurance company may have to determine who was liable for what portion of the accident or handle multiple insurance claims at once. This can cause the process to take longer.

Factors in the Insurance Claim Process

There can be many steps in a personal injury insurance claim. These factors may affect how long it takes insurance companies to pay out:

Connecting with Your Insurance Company

The first step after an accident is getting in contact with your or the responsible party’s insurer. If you choose to work with a personal injury lawyer from our firm, they can communicate with the insurance companies on your behalf. We will handle all interactions with the liable party’s insurance company in your case, including negotiations.

Investigating Submitted Claims

Investigating an accident can take considerable time. Insurance companies often have to do their own investigating when it comes to determining liability. This includes collecting information about a submitted claim, reviewing evidence, and other tasks.

Insurers do this to confirm the validity of the claim and how to move forward with it. For example, an insurer may need more critical information from you or another party. Make sure you submit all important documentation that could help your chances of moving forward on your claim.

Reviewing Policies

With multiple parties involved, several policies may need to be reviewed and interpreted to determine proper compensation. Insurance policies can contain a lot of detailed information, so reviewing each individual policy may take some time as well.

Damage Evaluation

Our team and the insurer will need to evaluate the damage your accident caused. Depending on the type and extent of your damages, this process can take some time. For example, working with medical experts may be necessary to estimate the value of your future costs of medical care.

Payment Arrangement

After evaluating your damages, our team can begin making payment arrangements. While this sounds like a simple step, it can be the cause of major delays—payment might be coming from a few different places.

Contested Claims

If the insurance company disputes your claim, this could delay the settlement process. A disputed claim may require you or your lawyer to present additional proof to an insurance company of their client’s liability or the extent of your damages. If the liable party’s insurance company refuses to make you a fair settlement offer, we can file a lawsuit and take your case to trial.

What to do If an Insurance Company Is Stalling on Your Payment

If you have covered all your bases and haven’t heard back from an insurance company, it can feel like the insurer is taking too long to pay your claim on purpose. There are widely documented strategies some insurance companies will use to delay a claimant’s payment. They include:

• Taking unusually long to respond to a claim
• Asking for more information over weeks or months at a time
• Losing your paperwork or sending you more forms to fill out
• Changing insurance adjusters on you unexpectedly
• Requesting an extension without providing a sensible reason
• Avoiding your calls, emails, or other communications

These are just a few stall tactics you may notice in your situation. Remember, you have rights under the law if you find that an insurer refuses to pay your claim. If the process delays have reached past the point of being reasonable, you can file a complaint with the New York State Department of Financial Services (DFS). This department is responsible for investigating complaints about insurance matters in the state.

Once this happens, the insurance company will have a certain amount of time to submit a written response to the department. This creates a record of your complaint, which you could use later should the matter require legal action.

Can You Sue If an Insurer Takes Too Long to Pay Out My Settlement?

If you feel that legal action is the next step, you can consult with one of our attorneys. They will review your situation and advise you of your legal options. You may be able to file a “bad faith” lawsuit against the insurer, and our attorney can advise you further.

The Deadline to Sue in New York

The longer you wait to file your claim, the longer it may take for the insurance company to pay out. Keep in mind that, per CPLR § 214, there is a general three-year statute of limitations on personal injury lawsuits in New York.

If you delay legal action and the statute of limitations runs out on your case, you likely will lose your right to seek compensation via a lawsuit.

Call Morelli Law Firm Today for Help with a Stalled Insurance Payout

Morelli Law Firm represents construction accident victims in New York City, on Long Island, and in New York State up to Albany. If you were hurt in a construction accident, we can handle all aspects of your insurance claim or lawsuit while you focus on your recovery. If we believe the insurance company is delaying your claim unfairly, our team may be able to file a complaint or take further legal action against it.

For a free case evaluation with our team member, call Morelli Law Firm today at (212) 751-9800. We represent clients on contingency, which means our firm does not charge attorney’s fees up front to start on a client’s case. We do not get paid unless you recover compensation via a settlement offer or court award.