San Diego Delay in Payment
Insurance companies in California must follow certain rules and laws set forth by the state department of insurance. Failure to comply with these rules can constitute insurance bad faith, leaving the policyholder with the option to file a claim to compensate for damages. One of the most common reasons for insurance bad faith is an unreasonable delay in payment for a valid claim.
If you believe an insurance company has willfully or unreasonably delayed payment for your insurance claim, you have legal options. Contact the insurance bad faith attorneys at Dawson & Rosenthal, P.C. to schedule a free case evaluation today.
Common Causes for Delay in Payment
Unfortunately, delayed payment of benefits is a common phenomenon, and many policyholders might not realize this constitutes insurance bad faith. When an insurance company prioritizes its own interests above those of an insured, it poses a financial hardship to the party who needs the claim funds – and who is entitled to them according to the terms set forth in his or her policy.
Many common reasons for a delay in payment exist, including:
- Unreasonably asking for additional evidence to support a claim.
- Requesting the same information from an insured multiple times.
- Insisting that an insured visit a doctor of the company’s choosing to complete an independent medical evaluation.
- Unreasonably disputing the veracity of an insurance claim or accusing the insured of fraud without evidence.
- Deliberately mailing the wrong forms.
- Denying claims based on incorrect paperwork that was the responsibility of the insurance company.
- Claiming that a policyholder abandoned a claim after failing to submit forms.
Who Is Liable for Delay in Payment?
Insurance companies are complex entities with many moving parts. Generally, an insured party talks to his or her agent following a request for benefits. That agent will provide information about submitting a claim, which a claimant will have to complete and send to the insurance company. This is when a bureaucratic shuffle begins: An insured’s claim goes to a claims adjuster, who investigates and evaluates a request. These individuals must also follow the rules set forth by their claims supervisors. Testimony from some claims adjusters has revealed they deliberately sent the wrong forms or erroneous information to delay the timely payment of claims, based on a supervisor’s orders.
No matter who directly contributes to the delay in payment, the insurance company itself is generally liable. Claims adjusters, agents, and supervisors are all representatives of the company, so the company will ultimately be liable for any damages a plaintiff incurs from delays in payment.
Delay of Payment Laws in California
California law requires insurers to make timely payment arrangements for valid claims. The state Insurance Code mandates an insurer to make payments within 30 days of the time in which a claimant and the insurer agree upon liability and the appropriate amount. If a company fails to make a payment within that 30-day time frame, its payment must bear interest. If legal action becomes necessary, the insurance company will also be responsible for all collection and attorney’s fees.
How to Resolve a Delay in Payment
An unreasonable delay in payment can be frustrating, especially at a time when a claimant needs benefits most. Claimants should take the following actions to receive payment of a claim:
- Don’t give up. Insurance companies purposely delay payments in hopes that a claimant will give up on his or her right to compensation, saving the company money.
- Save copies of all correspondence and forms sent by the insurance company.
- Contact an attorney to discuss legal options for recourse.
The attorneys at Dawson & Rosenthal, P.C. have a concentrated focus on insurance bad faith law. Contact our San Diego office today to schedule a free case review. We offer our services on a contingency-fee basis, so you’ll only owe attorney’s fees if we obtain a judgment or settlement on your behalf.