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How long is too long to pay your insurance settlement?

On Behalf of | Mar 2, 2022 | Bad Faith Insurance

Every driver in Pennsylvania must carry liability insurance, and you may take for granted that you will have coverage when you need to make a claim. The biggest companies that insure drivers spend millions of dollars on advertising campaigns bragging about how quickly and generously they resolve big claims.

When you get hurt or need to replace your vehicle after a crash, you expect that the insurance company will treat you fairly. Unfortunately, some insurance providers try to avoid their obligations to policyholders and claimants.

Bad faith insurance practices involve a company attempting to deny appropriate coverage under one of its policies. Extensive delays in paying a claim or settlement may constitute bad faith insurance practices.

Pennsylvania has rules about claim handling

Insurance companies would likely wait months to handle claims if they could. Pennsylvania state law creates a specific timeline for the insurance company to respond to notice of a claim and then the submission of necessary paperwork.

Insurance companies in Pennsylvania have to respond to the claim by sending you a letter and the necessary paperwork within 10 business days of you reaching out to them. Once you fill out and return the necessary paperwork, the company will have another 15 business days to make a decision and inform you of their determination.

Sadly, those laws do not extend to the payment of the settlement. The insurance provider does not have a specific timeline to follow, but they should follow through once they agree to pay a claim or to settle the claim in a timely manner.

When should you take action?

If the insurance company has agreed to a lump sum settlement but has not paid you after several weeks, you may need to follow up. If they agreed to pay invoices from a mechanic or to reimburse you for medical bills, the turnaround time on those payments should only be a few days or at most a few weeks.

When you believe that the delays in payments are an attempt to avoid obligations to you, you may have grounds for a bad faith insurance claim. The courts can order the insurance company to pay the settlement or claim and maybe even award you punitive damages. Identifying possible bad faith insurance practices can help you get the coverage you need after a crash.