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How Long Does the Insurance Company Have to Respond to a Demand Letter in Arizona?

When you get in an accident, you need the insurance company responsible for your damage claim to respond as quickly as possible, so that you can move forward with your life. While it’s important not to rush the settlement process, it’s also in your best interest to know that an insurance company has a limited amount of time to respond to your demand letter under state law in Arizona. This can help you take action to move things along if an insurer is taking too long to respond.

10 Days to Initially Respond

Most states have specific deadlines on how long an insurance company can take to respond to claims, investigate them and come to a decision. These deadlines help keep things fair for claimants by requiring insurance companies to respond promptly. Arizona’s insurance deadlines are found in Arizona Administrative Code, Section 20-6-801. Section E of this rule, titled “failure to acknowledge pertinent communications,” states that every insurance company has 10 working days to acknowledge the receipt of a claim, unless it pays the claimant within this period of time.

Upon receiving a claim, the insurance company should respond with a letter of receipt as well as the necessary claim forms and instructions for completing them so that the insured can complete the claim promptly. If an insurance company acknowledges the receipt of a claim over the phone, rather than in writing, the insurer must put a note of this in the claim file with the date. The 10-day deadline also applies to other types of pertinent communications from a claimant to which a reply is reasonably expected.

30 Days to Investigate

Once the insured submits the required claim forms and proof of loss documents to the insurance company, Section F of the Administrative Code requires the insurance company to complete its investigation of the claim within 30 days. However, the law leaves room for an insurance company to extend the investigative period if the investigation cannot reasonably be completed within 30 days.

If the insurer needs more time to investigate, it must notify the claimant within 15 working days of receiving the required forms and proof of losses. In this case, 45 days from the initial notification and every 45 days thereafter, the insured must send a letter to the claimant explaining why it needs additional time for the investigation. If the insurance company does not need more time for its investigation, state law gives a deadline of 15 working days to accept or deny the claim and advise the claimant of its decision in writing.

What if an Insurance Company Is Taking Too Long to Respond?

Under Arizona Revised Statute 20-461, no insurance company or representative thereof may fail to accept or reject a claim within a reasonable time after receiving a claimant’s proof of loss statements. Insurance companies have an obligation to make a good faith attempt to effectuate prompt, fair and equitable claim settlements in cases where liability is reasonably clear. Failing to promptly communicate with a claimant, process a claim or pay an accepted claim is a breach of the insurance company’s duty of care.

If an insurance company fails to respond to your demand letter in a reasonable amount of time and according to Arizona’s insurance laws, the insurer is guilty of bad faith. This can entitle you to financial compensation from the insurance company for its failure to properly handle your claim, in addition to payment for your original claim, if applicable. Contact an Arizona bad faith insurance attorney to discuss your rights in the face of an unreasonable claim delay. If you are a victim of bad faith, a lawyer can help you go up against the insurer to demand answers and accountability.