How Quickly Does an Insurance Company Have to Pay a Claim?

By Peter DePaolis

Securing an insurance settlement for your injuries and damages can be a cause for celebration. You may not realize, however, that it could take days or weeks to receive your first settlement check from the insurance company. While the state of Virginia doesn’t have hard deadlines for claims, insurance company are still responsible to issue payouts within a reasonable time frame after settling a claim. Some insurance companies, however, disobey the law and engage in bad faith practices. Learning what the laws say in Virginia could help you protect your rights.

Deadline for Payments: 30 Days

In 2013, Governor Quinn signed an act into law in Virginia that amended the state’s Code of Civil Procedure. The act created a new section that instituted deadlines for offering payment to claimants after settling civil matters. Section 2-2301 states that in a personal injury, wrongful death, property damage or another tort action in which the insurance company approves a claim for money damages, the insurance company must issue a release within 14 days of communicating a written confirmation of the settlement. The insurer then has 30 days from the date the claimant receives the release to pay all compensation owed.

In other words, if you do not receive a release from the insurance company until the 14th day of the initial deadline, then 30 days after that, about 45 days will pass between the time of reaching the settlement and obtaining your first check. Insurance companies must release payments as quickly and efficiently as is reasonably possible upon settling with you. If the insurance company misses a deadline, a judge may order the insurer to pay the original settlement plus additional costs in interest for each day that has passed since the deadline. The only exception to the 30-day rule is if the defendant is a government entity, such as the State of Virginia.

Expediting an Insurance Payment

While it is ultimately up to the insurance company to handle your claim fairly and issue your payment within the 30-day deadline, you could do things that may expedite the claims process. Hiring a lawyer, for example, could ensure you complete all paperwork quickly and correctly during your insurance claim. Paperwork mistakes and missing information are common reasons for insurance companies to delay investigations, resolutions and payouts.

Communicating often with the insurance company could also keep you in the loop and hold the insurer accountable during your claim. Staying on top of your claim, its timeline and all applicable deadlines could show the insurance company you are not an easy target for insurance bad faith. Keep a log of all communications between you and the insurance company in case you need them for a complaint later.

Do You Have an Insurance Bad Faith Action?

Unreasonably denying a claimant’s payout is a common form of insurance bad faith in Virginia. If it has been 30 days since the receipt of the settlement release from the insurance company and you still have not received a settlement check, contact the company to find out what happened. A clerical error such as sending the check to the wrong address could have delayed the payment. If the insurance company does not have a valid reason for the delay or you continue to not receive a check, however, you could be the victim of insurance bad faith.

Delaying a client’s payment may be an attempt on the defendant’s part to save money or get out of paying altogether. If you suspect insurance bad faith, contact a Fairfax bad faith insurance attorney to help you fight against the negligent insurance company. Your lawyer can help you file a complaint with Virginia’s Department of Insurance and bring a bad faith claim against the insurer. Filing a bad faith lawsuit against the company for a delayed or absent payment could result in compensation not only for the original amount owed but also for additional fines and penalties against the insurance provider.

About the Author
Peter DePaolis joined the firm in 1980 and has since represented a large number of individuals involved in automobile collisions, truck accidents, bus crashes, defective products, and medical malpractice cases. A significant portion of Mr. DePaolis’ practice is devoted to working on behalf of people suffering from asbestosis, mesothelioma, and other asbestos-related cancers. He has led his firm’s fight against the asbestos industry and has recovered over $30 million in damages for asbestos victims and their families.