Recently, Laura Ferguson’s car was crushed by a huge oak tree during a thunderstorm, but two months later her auto insurer Chelsea MA had still not made a decision about whether to deny or accept her claim of a total loss. The 45-year-old mother of two resides in Chelsea, Massachusetts, the second most densely populated city in the state despite having the smallest land area.
Is There a Time Limit for Insurers to Settle Claims?
Ferguson’s car insurance policy carried comprehensive coverage, which was supposed to pay for the damages caused by weather and other acts of nature. She was (understandably) growing impatient waiting for a claim settlement. After all, her only vehicle was totaled, forcing her to pay for a rental car to allow her to get to work and pick up her kids from school.
In Massachusetts, there is no specific time limit for the settlement of claims, although home and auto insurance issuers are required by law to pay all claims in a “prompt and reasonable amount of time,” which of course is open to interpretation.
To give you an idea of what constitutes a reasonable time frame, most auto insurance companies try to settle claims within 30 days of filing. Nonetheless, a few days or weeks can add up if the claim process involves additional investigations.
Nationwide, delay in claim settlement is the most common complaint of policyholders, followed by denial of claim and low settlement, prompting some states such as Texas and California to create a specific time limit for insurers that entitles them to acknowledge all claims, to accept or deny claims, and to pay their customers within a specific time frame.
How to File a Complaint
Take note that the claim process involves reviews, investigations, adjustment, decision, settlement, and other administrative layers. Hence, it is wise to be sure that you’re always available to answer questions and provide the claim adjuster with sufficient evidence and documentation.
But if you think that you have already done your part and you still suspect that your insurer is dragging out your claim, you may contact the State Department of Insurance, which oversees complaints filed by policyholders.
Remember that if you’re already represented by an attorney, the State Department of Insurance will not work on your behalf; they are not authorized to render legal opinions or intervene between lawyers and their clients.
Should you decide to take the legal route, first consider requesting pre-lawsuit mediation because it can save you thousands of dollars and provide results in a few months as opposed to years if you resort to litigation.
Sometimes, the processing of a vehicle insurance claim may seem like an endless process of investigations and red tape. This is particularly true with subrogation in which your insurer is summoning the other driver’s insurer (or other third party) to pay for the damages.
When filing for a claim, keep your facts straight, document everything in writing, and keep a current file of your recordings, photos, paperwork, and other evidence. This sort of organization will go a long way in expediting the process and getting you closer to a positive result.