How Long Does an Insurance Company Have to Investigate a Claim?

The time it takes an insurance company to investigate your car accident claim can vary from state to state. Typically, after insurance companies acknowledge the recipient’s claim within 15 days, the investigation itself ranges from 30 to 45 days.

Some states have statutes that convey how long insurers must complete each step of the claim process, whereas others leave time limits more ambiguous. There may also be delays that vary how long an insurance company has to investigate your claim.

Consult with an auto accident lawyer to learn the laws within your state so you’ll learn how long each step should take. This legal guide generally covers the rules surrounding an insurance claim, but direct advice can only come from an attorney.

Insurance Claim Requirements for Car Accidents

When it comes to how long to file an insurance claim in the U.S., the general requirements for claimants and insurance companies are:

• Prompt Pays: Every state except South Carolina is expected to pay or deny claims within a specified time, usually 30, 45, or 60 days. Insurers may be required to pay electronic claims faster than paper claims. Not doing so may face fines for failing to pay claims on time.
• Insurance companies must act in good faith and fair dealing by providing:
  • Prompt communication with the client
  • Investigating claims thoroughly
  • Responding to claims promptly
  • Pay or deny claims within a reasonable time
  • Provide a written explanation for denying claims
• Claimants must cooperate with the insurance company and may be required to:
  • Submit to examination under obligation
  • Show damaged property and injuries
  • Pay deductible for some types of claims

If insurance companies fail to follow these requirements, you may need an attorney to force your claim to conclude in good faith.

Insurance Claims Must Resolve in a ‘Reasonable Time’

Depending on your insurance claim, state laws, and statute of limitations, the time to resolve your claim may take two to four weeks. Sometimes, delays arise due to how serious your claim is and its complex circumstances.

Most states have about 45 days to investigate, but insurance companies may request an extension for serious accidents.

Typically, insurance companies are required to pay the claim within a reasonable amount of time. Yours and the insurance companies’ definition of this term may differ as most policies don’t provide a strict deadline for when the claim will be completed.

However, you may promptly file a claim and wait until the insurance company gets back to you within 30 to 60 days (varied by state). If you believe the delays surrounding your claim are invalid, you’re more than within your right to investigate with an attorney.

Penalties for Insurance Companies if They Take Too Long

Penalties, interest, and other fees may be charged if the insurance company is late or does not complete the claim process within a reasonable amount of time. Such penalties may include:

1. Late Fees and Interest—Insurance companies may be required to pay interest on claims as high as 18% yearly.
2. Fines—Insurance companies may face penalties for failing to pay claims in a reasonable time. For example, Georgia fined UnitedHealth $2.4 million for failing to adhere to the state’s 15-day prompt payment requirements.
3. Loss of License—Insurance regulators may repeal an insurance company license or credentials of authority for recurrence in promptly completing claims.
4. Bad Faith—Lawsuits may be filed against the insurance company if they delay claims for too long. For instance, discrimination against a protected class is illegal, and insurance companies will sustain a huge penalty if they discriminate against their clients.

If your insurance company takes a long time to process your claim, you may hire an attorney to remind the company of its obligations and bring a lawsuit against them.

The Insurance Investigation Process

The insurance investigation process may be stressful, but accurately reporting your damages can hasten these steps.

You should file a claim online, by mail, and for some insurance companies by phone. The sooner you file, the faster and more accurate your claim can be processed.

Insurance companies often follow these steps when investigating your claim, with varying time limits and delays involved in the process. It’s important to be familiar with these steps so you know where your insurance claim is going.

Receipt of Your Claim

The beginning of filing a claim can take up to 15 days until your insurance company acknowledges the receipt of your claim. Your insurance company may ask for all documentation necessary for analyzing the accident.

Necessary documentation varies state-by-state, but one important form to acquire at the scene of the accident is a police report.

Most states require the police to complete a report at the scene of the crash. Requesting a copy can help your lawyer retaliate if insurance companies delay your claim or ask for more information.

Accept or Denying Your Claim

After verifying your claim and the documents you sent, the insurance company will decide whether to approve or deny your claim.

The insurance company will send a letter of notice if your claim was rejected and the reason why. You may ask for more details by calling your insurance provider and requesting an appeal.

If your claim was approved, you should be connected with a broker who is your primary contact in handling your claim’s process.

Work with your attorney to provide your broker with a list of your damages and injuries. Provide as much necessary information for your broker to continue with your claims process.

Investigation Process

An adjuster will investigate your claim to determine the loss or damages covered by your insurance policy. Be wary of these adjusters, as they work with the insurance company to minimize your settlement to maintain their bottom-line.

Work closely with your attorney before signing documents or agreements. You don’t want to agree to something that may hinder settlement negotiations in the next step.

After the insurance adjuster evaluates all the damages, they will help provide a list of preferred agents to assist with repairs. You don’t have to hire these dealers, but it can help save you time if you’re unsure who to go to for repairs.

The Initial Settlement Offer

After completing repairs and restoring lost or damaged items, your adjuster will contact you regarding an initial settlement offer. You may settle with the initial offer or deny it if you feel the settlement isn’t enough.

It’s recommended to hire an attorney when reaching this step so they can help verify if your losses are properly compensated.

In most cases, you may use the initial offer to start negotiating a counteroffer. Medical bills can develop over time and lost wages add up as you recover.

Make sure your settlement can properly compensate you now and in your immediate future. Accepting a settlement offer will prevent you from requesting further compensation for your injuries and losses.

Can Insurance Companies Request More Time?

Yes, state laws allow insurance companies to request more time to conduct a thorough investigation for car accident cases. These are cases involving multiple parties and serious damages were sustained.

Insurance companies are required to resolve claims within a reasonable time, even after asking for extensions.

If your insurance company takes too long to resolve your claim, you may have the right to sue for delay. Contacting an attorney can assist you in the claim process and explain your rights as a policyholder.

Possible Delays in the Investigation Timeline

Several reasons may happen for delays during an investigation timeline such as:

• The complexity of the case
• Number of parties, witnesses, and allegations. The more parties involved, the more time the investigation may take
• Lack of time and resources could cause delays
• Vacation and holiday schedules for work
• Lacking a qualified investigator for your case
• Police investigation or involvement may cause delays

These are some of the reasons your claim may be delayed. It may be stressful to wait for results, but you may find an attorney to ease your burdens and help you in the claim process to ensure your claim follows proper procedure.

How Long is Too Long to Wait for an Insurance Claim?

How long an insurance claim should take depends on the type of claim you filed, the state you reside in, and your case’s complexity. Below are the types of claims you could file and the cap it should not exceed:

Homeowner claims—covers loss or damages of property caused by theft and against peril such as fire or storm damages. If over a month has passed and you received no response since filing, it is taking much longer than it should.

Commercial claims—covers loss or damages by filing a claim to the business insurance company for compensation. These can also include customer injury, weather damage, fire, or things that damage business property. If it takes longer than three months, it’s taking way longer than it should to settle.

Auto insurance claims—covers damages to your vehicle, possessions, and injuries during an auto accident. The timeframe for most states is 30 days, but it can be longer depending on your state.

Personal injury claims—cover all injuries caused by another negligent party. These are much more complex as they examine one’s injuries and the other party’s negligence. If the injuries are severe, the timeframe may be up to six months to several years.

Therefore, depending on your claim, the process may be short when you file for homeowners insurance versus personal injury claims. Find a lawyer to help review your claim and track the process.

What Happens if Your Case Is Denied Compensation?

Unfortunately, if your claim is denied, the reason could be that your policy doesn’t cover certain damages or losses you are filing for. However, you may file an appeal to the court so there is a legal authoritative power to decide your case.

Gather the necessary evidence to support your claim if you plan to appeal. Find a lawyer to help you prepare for the hearing and demonstrate how to present your case.

Negotiate a settlement and explore further appeal options like filing a lawsuit if your denial is sustained.

Sort Out Your Legal Claim With an Auto Accident Attorney

Find an auto accident attorney with LegalASAP to sort out your claim. It can be stressful to handle a claim on your own, thus, having an attorney to navigate you through the process is invaluable.

LegalASAP has a network of hundreds of law firms established across the United States, helping you search for an attorney who truly understands your case.

Submit a free quick evaluation form here and we will see if you qualify for a claim. You may also call us at (888)927-3080 if you have further questions or concerns about your situation.