When you file a claim with your insurance company, naturally, you want a prompt and decisive resolution. You expect your insurance company to pay your claim in timely manner, just like you timely pay your premiums every month, and to adequately compensate you for any losses or damages you have suffered, helping you to recover an unfortunate event as quickly as possible.
Alas, it doesn’t always work out that way. It’s critical to remember that insurance companies are for-profit businesses, and they make money by selling paid promises of coverage for specific events. Every time the insurance company pays out on a claim, the company loses money. Unfortunately, this means that, in general, insurance companies are incentivized to delay, deny, and undervalue claims of their policyholders whenever possible.
Common Reasons for Insurance Company Delays
Today, we’re going to look at some of the specific reasons insurance companies engage in tactics to stall or delay resolution of your claim.
When an insurance claim is delayed, it benefits the insurance company in several ways. First and foremost, constant delays can wear down the policyholder, making them more likely to accept a lowball offer. As policyholders face mounting economic fallout from an accident or catastrophic event resulting in property damage, they begin to feel desperate and may be willing to settle for far less than what they are rightfully owed under their policy.
Moreover, insurance companies make money by investing the money you pay in your monthly premiums. For this reason, every time payment on your claim is delayed, it provides the insurance company with another month or two to draw on the interest from your premiums, padding their revenues and adding to their bottom line.
As a policyholder, you should also know that insurance companies sometimes delay claims as retribution. In other words, if you exercise your rights as a policyholder in a way that really inconveniences the insurance company, they may take it out on you by unnecessarily stalling and delaying resolution of your claim.
Delays by the insurance company can take many forms, including:
- Simply taking a long time to respond, or “radio silence.”
- Poorly implementing established procedures and practices for timely investigating and processing claims.
- Misrepresenting various aspects of a policy or claim.
The bottom line: The longer an insurance company delays your claim, the more money they can collect from interest on your premiums, and the more they can potentially wear you down to ultimately accept a settlement that’s far below what you truly deserve and are owed under your policy.
How to Handle Insurance Company Delays
If you’re dealing with bad faith tactics from an insurance company, you need backup from skilled insurance attorneys. At McLaurin Law, we have substantial experience handling bad faith insurance tactics, and a reputation for passionately defending the rights of policyholders in Houston. To speak with one of our insurance lawyers, contact McLaurin Law today.