Can Insurance Companies Be Held Liable for Delaying an Injury Claim?
Filing an injury claim should not mean waiting for an insurance company as it unnecessarily delays processing or payout. Unfortunately, insurance companies will try many tactics to avoid paying claims, including unnecessary or unethical delays. If an insurance company is intentionally delaying an injury claim without a valid reason, it could be guilty of insurance bad faith. In this case, it can be held liable for the delay.
What Are Common Reasons for Delaying an Injury Claim?
Many states limit how much time an insurance company has to investigate a claim, make a decision, and cut a settlement check. In Arizona, insurance companies have no more than 30 days from the date they receive all of the necessary documents and evidence from the claimant to complete their investigations. If the insurance company cannot reasonably complete the investigation within this time, it must request an extension in writing with a valid reason.
Valid reasons for insurance delays include:
- Incomplete or incorrect information on a claims form
- Requests for further information or evidence, within reason
- Delayed evidence submissions by hospitals, auto mechanics, etc.
- Missed insurance claims filing deadline
- Failing to comply with the insurance company’s rules
- A liability dispute between two or more parties
Under the Arizona Unfair Claims Settlement Practices Act, all insurers must act promptly to communicate with clients after receiving claims. They must also accept or deny coverage within a reasonable time after receiving proof of loss statements. What constitutes a reasonable time is defined by law, with time estimates for different stages of the insurance process that range from 10 to 45 days. If the insurance company does not investigate or respond within a reasonable amount of time, it may be guilty of insurance bad faith.
What Is Insurance Bad Faith?
All insurance companies have a legal obligation to process a claim in good faith, meaning in an honest attempt to come to a prompt, fair, and equitable settlement when liability is reasonably clear. Insurance bad faith means that the insurance company is knowingly or intentionally mishandling a claim, often in an attempt to save money on claims payout. Delaying an injury claim without a valid reason is a common bad-faith insurance tactic.
Some examples of ways in which an insurance company may act in bad faith are:
- Ignoring your initial demand letter as a way to bully you into accepting a lower offer
- Stating that there is insufficient information or evidence
- Asking for excessive documentation
- Failing to conduct a proper investigation
- Refusing to pay a fair amount for your damages
- Delaying communication about a submitted claim
- Misinterpreting or misrepresenting the terms of the policy
- Delaying your payout
- Wrongfully denying your claim
In these situations, you may be the victim of insurance bad faith in Arizona. This will give you the right to file a lawsuit against the insurance company. A bad-faith insurance lawsuit seeks to hold the insurance company civilly liable for failing to properly handle a claim. You may be entitled to financial compensation from the insurance company to penalize it for bad faith, in addition to an adequate amount for your original claim. If, on the other hand, the insurance company can prove that it had a valid and lawful reason for the delay, it may not be liable.
When to Contact an Insurance Bad Faith Attorney
Your injury claim may be delayed at the insurance level for a variety of reasons, both valid and invalid. The best way to speed up the claims process is by hiring an attorney to help you with the paperwork from the very beginning. Your bad faith insurance attorney in Arizona can help you avoid making mistakes that can delay the processing of your claim. If the insurance company treats you unfairly and unlawfully delays your claim, your attorney can help you go up against the insurer in a bad-faith lawsuit.