Hitting a roadblock with an insurer after an incident isn’t uncommon, even if someone else caused the problem in the first place.
Insurance carriers deny valid claims all the time. Even if they don’t flat-out deny a valid claim, claims adjusters regularly seek to minimize payouts, regardless of who caused the incident.
But why do they do this?
To save money. Well, to save themselves money, not to save you money.
Why Do Insurance Companies Delay Claims?
Delays in processing valid claims are a known tactic used by some insurance companies. While there are legitimate reasons for slowing the process, many delays are motivated by financial interests. Below are common reasons why insurance companies delay claims:
1. Financial Strategy to Increase Profits
Insurance companies are for-profit businesses, and holding onto funds for as long as possible helps increase their profits. When companies delay payouts, they benefit from the interest earned on funds that should have been allocated to claims.
2. Complex Claims Process
The insurance industry often involves intricate processes with extensive documentation requirements. Adjusters may ask for additional information, medical records, or even witness statements, which can take time to gather. While this can be necessary to verify the validity of claims, the complexity often leads to extended wait times.
3. Waiting for the Policyholder to Settle
Some insurers use delays to pressure claimants into settling for less than their claim is worth. By prolonging the process, insurance companies hope that claimants, tired of waiting, will accept a lower offer rather than continue to fight for the full amount.
4. Denying Liability or Shifting Blame
In certain cases, insurers may deny liability outright or attempt to shift blame onto a third party. This is particularly common in auto accident cases where insurance companies may argue that another driver or even the claimant was partially at fault, which can delay or reduce the settlement.
5. Investigative Delays
Insurance companies sometimes conduct extensive investigations into claims, particularly when the claim involves a substantial amount of money. This can include reviewing medical histories, conducting surveillance, or even hiring private investigators. While thoroughness is essential, these investigations can create significant delays.
6. Understaffed or Overworked Adjusters
Insurance companies may not allocate sufficient resources to their claims departments, resulting in overworked or understaffed teams. This can create bottlenecks in processing claims, causing delays even in straightforward cases.
7. Legal Tactics and Compliance Concerns
Some claims require legal review, especially if they involve unique circumstances or complex policy language. Additionally, state laws regulate insurance practices, and complying with these regulations can add to processing time.
Steps to Take If Your Claim Is Delayed
Understanding your rights and taking proactive steps can help mitigate the impact of claim delays. Here are actions claimants can take if their insurance claim faces unwarranted delays:
1. Communicate Clearly and Document Everything
Maintain detailed records of all communications with the insurance company, including phone calls, emails, and any documents sent or received. Documentation can be crucial if you later need to escalate your case or involve a legal professional.
2. Respond Promptly to Requests
Insurance companies sometimes request additional information or documentation to process a claim. Responding promptly to these requests can prevent further delays and demonstrate your willingness to cooperate.
3. Familiarize Yourself with Your Policy
Understanding your policy’s coverage limits, exclusions, and deadlines can be beneficial. Insurance companies are less likely to delay a claim if they know the claimant is informed about their policy.
4. Follow Up Regularly
Regular follow-ups keep your claim on the insurer’s radar and demonstrate that you are not willing to let it fall through the cracks. Polite but consistent communication can remind the adjuster to prioritize your case.
5. Consider Mediation or Arbitration
Some insurance policies include dispute resolution clauses, which may involve mediation or arbitration. These processes can help resolve claims more quickly than litigation, and many insurance companies prefer to avoid court if possible.
6. Consult with an Attorney
If your claim remains delayed despite your efforts, consulting with an experienced Phoenix car crash attorney may be necessary. Legal professionals, particularly one with experience handling Phoenix car accident claims, can assess whether the insurer is acting in bad faith and advise on the best course of action. Many Phoenix injury attorneys offer free consultations for initial advice on delayed insurance claims.