Why Insurers Delay Claims
Insurance companies profit from holding onto premium dollars. Every day they delay paying your claim, they earn interest on that money - and you suffer the consequences. Some delays are legitimate (complex claims require investigation), but many are deliberate bad faith tactics designed to:
- Pressure you to accept less: Financial desperation leads to accepting lowball offers
- Hope you give up: Many policyholders abandon claims out of frustration
- Run out the clock: Delays may push you past statutes of limitations
- Earn investment income: Insurers profit from holding your money
- Wait for circumstances to change: Your situation may weaken your claim
The good news: most states have regulations requiring insurers to process claims within specific timeframes. Violating these deadlines can constitute bad faith.
State-Mandated Claim Timelines
Every state has regulations governing how quickly insurers must respond to claims. While specific deadlines vary, here are common requirements:
| Action Required | Typical Deadline | Notes |
|---|---|---|
| Acknowledge claim receipt | 10-15 days | Must be in writing |
| Begin investigation | Immediately | Cannot wait for documentation |
| Request additional information | 15-30 days | Must specify what's needed |
| Accept or deny claim | 30-45 days | From receipt of complete information |
| Issue payment after acceptance | 5-30 days | Some states require immediate payment |
| Respond to communications | 15-30 days | Cannot ignore policyholder inquiries |
California has some of the strictest claim handling deadlines in the nation:
- 15 days: Acknowledge receipt of claim in writing
- 15 days: Provide necessary claim forms and instructions
- 40 days: Accept or deny claim (from receipt of proof of claim)
- 30 days: Issue payment after acceptance
- Every 30 days: If more time needed, send written status update with reasons
Failure to meet these deadlines can result in Department of Insurance penalties and support a bad faith lawsuit.
Common Delay Tactics and How to Respond
🔍 The "Ongoing Investigation" Excuse
The insurer claims they're "still investigating" without explaining what they're investigating or providing a timeline. Months go by with no progress.
📝 Endless Documentation Requests
The insurer keeps requesting more documents, often asking for the same things repeatedly or requesting information that's irrelevant to your claim.
👤 The Disappearing Adjuster
Your assigned adjuster doesn't return calls or emails. When you finally reach someone, they say your adjuster is "no longer with the company" and your file is being reassigned.
📁 "We Never Received That"
The insurer claims they never received documents you've already sent, forcing you to resubmit and restart the clock.
🏥 Waiting for Medical Records Forever
For injury claims, the insurer claims they're waiting on medical records - even when you've provided authorizations and records have been sent.
📊 Expert Reviews That Never End
The insurer sends your claim for "independent" review by engineers, doctors, or other experts, then claims they're waiting on the report - indefinitely.
Document every interaction with your insurer. After phone calls, send an email: "Per our conversation today at [time] with [representative], you stated [summary]. Please confirm this is accurate." This creates evidence for a bad faith claim.
When Delays Become Bad Faith
Not every delay is bad faith - some claims genuinely take time to investigate. However, delays cross into bad faith territory when:
- The insurer misses regulatory deadlines without explanation
- Delays appear designed to pressure you into accepting less
- The insurer provides false or misleading reasons for delays
- Requests for information are unreasonable or duplicative
- The insurer fails to respond to your communications
- Delays continue after you've provided all requested information
- The insurer ignores evidence supporting your claim
The Financial Impact of Delays
When proving bad faith, I help clients document the real cost of delays:
- Interest on loans taken to cover the loss
- Rental costs while waiting for property repairs
- Medical bills going to collections
- Credit score damage
- Lost business income
- Emotional distress from prolonged uncertainty
Statutes of limitations continue running while insurers delay. If you've been waiting months for a response, consult an attorney to protect your rights before deadlines expire.
How to Fight Unreasonable Delays
Step 1: Send a Time-of-the-Essence Letter
Put the insurer on notice in writing. Cite the relevant state regulation, document how long you've been waiting, and demand a response within a specific timeframe (typically 10-15 days).
Step 2: File a Department of Insurance Complaint
Every state has an insurance department that accepts consumer complaints. While they can't force payment, their inquiry often gets results - and creates a regulatory record of the insurer's conduct.
California DOI complaints are particularly effective. The Department has authority to fine insurers for claims handling violations and maintain public records of complaint history. File online at www.insurance.ca.gov.
Step 3: Escalate Within the Company
Request your claim be escalated to a supervisor or manager. Ask for their direct contact information in writing. Sometimes going above a stalling adjuster gets results.
Step 4: Send a Bad Faith Demand Letter
A well-crafted demand letter from an attorney puts the insurer on notice that their delay tactics are creating liability. This often prompts immediate action.
Step 5: Consider Legal Action
If delays continue despite your efforts, you may need to file suit. In many states, you can recover additional damages for bad faith delay beyond your original claim amount.
Related Guides
Is Your Insurer Stalling Your Claim?
I help policyholders hold insurers accountable for unreasonable delays. A demand letter citing specific regulatory violations often gets claims moving quickly.