How long does an insurance company have to investigate a claim?

Posted on June 6, 2023

Insurance companies generally have around 1 month to investigate a claim. The exact time period depends on the state. The length of the investigation can also vary based on the complexity of the case, the amount of the losses, and the difficulty in obtaining evidence.

Many states allow insurers, including car insurance companies, to request an extension in some cases. At the end of the investigation, your claim will either be

• accepted or
• denied.

If accepted, an insurance adjuster will make an initial settlement offer.

Does an insurance company have a time limit to investigate a claim?

Yes, insurance companies have a time limit to investigate an insurance claim against the company. However, that time limit can vary by state and by the type of claim. In some states, it is just a “reasonable amount of time.” Before this time period ends, insurance companies must decide whether to accept or deny your claim in whole or in part.

Different states handle this issue differently.

New York law

In New York, for example, the law is very specific. Insurance companies have:

• 15 days after receiving your claim to acknowledge its receipt and to send you instructions and paperwork regarding your legal damages, also known as “proof-of-loss statements,”
• 15 days after receiving your claim to initiate an investigation,
• 15 days after receiving your proof-of-loss statement to decide whether to accept or to deny your claim or to seek an extension, and
• 5 days to pay out an accepted settlement offer.¹

If you immediately submit your paperwork and immediately agree to a settlement, this means that insurers have up to 30 days to conduct an investigation, and 35 day to payout an agreed settlement. If you take your time to submit your proof-of-loss statements, it can take longer.

Florida law

In Florida, meanwhile, the timeframe to finish an investigation depends on the type of insurance coverage. If the claim involves personal injury protection (PIP) coverage, insurance companies must pay or deny a claim within 30 days.²

Investigations into all other types of insurance claims, however, must be completed within a reasonable about of time after receiving your proof-of-loss statements.³

What happens after I file my insurance claim?

If you get hurt because someone else was negligent – often in a car accident – you will file a claim for compensation with the insurance company.

If you live in a “no-fault” state that requires you to carry PIP insurance, you will usually file this claim with your own insurance company. If you live in a state that requires the at-fault driver to compensate the victims that they have hurt, you will file this claim with the other driver’s insurer.

This initiates the car insurance claims process.

Once the claim is filed

The insurance company will conduct an investigation into what happened. If fault matters, they will look for signs of who caused the crash. This often involves viewing the scene of the accident and the police report.

In both at-fault and no-fault states, they will investigate how badly you have been hurt. This generally involves reviewing your medical treatment and bills for your bodily injuries. Based on what they find, they will accept or deny your insurance claim.

That investigation generally has to be done in around 30 days or a reasonable about of time, depending on the state. A car accident attorney may be able to speed up the process, though.

If your claim is denied

If a part or your entire claim gets denied, you can appeal the denial. A denial is usually done because your insurance policy does not cover the accident. Some denials, however, are done in bad faith.

If your claim is accepted

If your claim gets accepted, the insurer’s claims adjuster will make an initial settlement offer. This offer, while it will usually cover your current medical bills and property damage, will drastically undercompensate you for your losses. It will also not cover your deductible.

Nevertheless, the offer is enticing to many claimants because they are only just beginning to appreciate the extent of their medical debt. This is not a mistake.

Insurance companies count on this financial pressure to settle. It lets them make lowball offers initially. By paying you far less than what you deserve, insurance companies can protect the profits that they make from their premiums.

The initial settlement offer is hardly ever the final one. It just initiates a negotiation process. With the help of a personal injury lawyer, you can use a settlement formula to estimate what you deserve. Then you can make a counteroffer and work your way towards a compromise.

Filing a lawsuit

If no compromise is reached, you and your personal injury attorney can file a lawsuit. This has to be filed before the applicable statute of limitations has run.

Even after it has been filed, the settlement negotiations will continue. The vast majority of personal injury claims settle out of court.

If no fair settlement offer is made, the personal injury claim will go to trial. After the trial, the judge or jury will issue a verdict that states what you are owed.

Does this only apply to a car accident claim?

No. While auto accidents are a common source of insurance claims, they are not the only ones. You may also file a claim against an insurance company after you get hurt:

• by a defective product,
• by a negligent doctor,
• after slipping and falling on someone else’s property, or
• in a dog bite incident.

In all of these cases, the insurance company has a limited amount of time to investigate your claim. After conducting this investigation, they will decide whether to accept or deny your claim.

What is the law in California?

In California, insurance companies generally have 40 days to investigate a claim and either accept or deny it. That time period begins when the insurer receives a proof of claim.⁴

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