The amount of time that insurance companies have to investigate a claim depends on the state. It is generally anywhere from a couple of weeks to over a month. The length of a particular investigation will depend on several factors, like the claim’s complexity and the amount at issue. Insurance companies can also request more time to complete it.
Insurance claims must be resolved in a “reasonable time”
Once it has received an insurance claim, the insurance company has to resolve it in a reasonable amount of time. This requirement is often a state law. It is also usually stated in the insurance contract.
This applies to all types of claims, including insurance claims against a:
- car insurance policy after a car accident or truck accident,
- motorcycle insurance policy after a motorcycle accident,
- business liability policy after getting hurt by a defective product or slipping and falling on the business premises,
- homeowners’ insurance policy after a dog bite or a slip and fall, or
- malpractice insurance policy after legal or medical malpractice.
Many states have laws that explicitly lay out the timeline for resolving a claim. However, those time limits can be drastically different.
Time limits vary by state
In the states that specify how long insurance companies have to resolve a claim, insurers may be given anywhere from 15 days to over a month to investigate. Some other states merely require the investigation to be concluded in a “reasonable amount of time” or “reasonably promptly.” States may also have different rules for different types of insurance claims.
Below are a few examples.
California law
California law gives insurance companies 40 days to investigate a claim and either accept or deny it. Those 40 days begin when the company receives a proof of claim.[1]
New York law
New York’s law has time limits for each step in the insurance claim process. In that state, insurance companies have:
- 15 days to acknowledge the receipt of your claim and send you proof-of-loss paperwork,
- 15 days after receiving your claim to start the investigation,
- 15 days after receiving your proof-of-loss statement to decide whether to accept or deny the claim or to seek an extension, and
- 5 days to pay an accepted settlement offer.[2]
This means insurance companies have 30 business days to conduct their investigation if you do not delay. If you take time to submit your paperwork, the process can take longer.
If the insurance company takes longer than allowed, they must explain to you why it is taking longer.[3] Penalties may be assessed.
Florida law
Florida is a state that differentiates between types of insurance and does not set a firm time frame.
Insurance claims against personal injury protection (PIP) coverage must be paid or denied within 30 days.[4] All other types of insurance claims must be completed within a reasonable amount of time after receiving a claimant’s proof-of-loss statement.[5]
The car insurance claims process
No matter what type of insurance is implicated, the general process for filing a claim is the same:
- you get hurt or suffer some other losses in a way that is covered by an insurance policy,
- you file a claim against the insurance company,
- the insurance company investigates your claim,
- the company decides whether to accept or deny the claim, and
- if it accepts the claim, the company makes a settlement offer.
Because claims against car insurance policies are the most common, we will describe how it works after a car accident.
According to the outlet Consumer Affairs:
“In 2021, there were 4.2 auto collision insurance claims filed per 100 drivers in the U.S., though this was well below the previous average of around 5.6 from prior years, likely because of the coronavirus pandemic”[6]
Filing the claim
If you were in a car accident and got hurt or your car was damaged, you can file a claim for compensation with the auto insurance company. Where you would file the claim depends on the circumstances.
If you live in a “no-fault” state that requires you to carry PIP coverage, you would typically file the claim with your own insurance company, regardless of who was at fault. If you do not live in a no-fault state and the other driver was responsible for the crash, you would typically file the claim with their insurer.
Filing the claim generally requires:
- contacting the insurance company, whether over the phone or through their website or mobile app,
- filling out and submitting a proof of claim form, and
- providing a copy of the police report, if one was made of the accident, or other relevant information.
Keep a copy of all documents you submit, as well as your medical records. This is especially important if you are filing a claim against the at-fault driver’s insurance company. These claims are more confrontational. Because you are not one of their policyholders, that insurance company will not treat you as well.
The insurance company investigates
Once it has received your claim, the insurance company will send an insurance adjuster to investigate. The claims adjuster will try to determine how much compensation you need. If fault matters, they will also look for signs of who caused the crash.
Based on what they find, the insurance company will either accept your claim, if it falls within the terms of its coverage, or deny it.
During this time, you will have suffered losses, like medical bills, property damage, lost wages, and other types of damages. Until the insurance company resolves your claim, you will not have been compensated for them. This is why state laws require insurance companies to investigate claims promptly.
The claim is accepted or denied
If the insurance company decides that the claim does not fall within its insurance coverage, it will deny it. If it denies the claim, you can appeal that decision. If it was denied in bad faith, you could be entitled to compensation.
If your claim is accepted, the insurance company can either:
- pay the full amount, or
- offer a different amount.
The initial settlement offer
The amount that the insurance company initially offers is the initial settlement offer. In order to receive the money, you will have to waive your legal rights to file a lawsuit.
It is important to remember that insurance companies are for-profit corporations. They make money by receiving premium payments and paying out as little as possible in claims. The timing and the amount of the initial settlement offer is designed to undercompensate you. It will also not cover costs below you deductible.
The initial settlement offer is not a final one. You may be able to negotiate for more.
If a fair settlement amount is not offered, you can file a lawsuit. You must do this before the statute of limitations for personal injury claims has expired.
Reasons for a delay in a car accident claim
There are several common reasons why an insurance company may want more time to resolve a claim. They include:
- it is difficult to figure out who was at fault for the accident,
- the settlement would be very large, such as one for wrongful death, and
- the insurance company is willing to withhold the settlement from you until you accept a lower amount.
How personal injury lawyers can help
While accident victims can file an insurance claim on their own, there are several reasons to hire a personal injury attorney to help:
- a lawyer will have a better idea of how much compensation you deserve,
- they will advocate on your behalf,
- you will not have to worry about filing the claim, and
- their experience filing similar claims means that a persuasive claim for compensation can be filed more quickly, expediting the process.
It is especially important to have legal representation if you are filing the claim against the at-fault party’s insurer. These insurance companies will do what they can to protect their policyholder. The car accident attorneys at our law firm have found that insurers have numerous techniques for combating claims, including drawing out the investigation until you are willing to accept a lower payout.
Legal Citations:
[1] 10 California Code of Regulations (CCR) 2695.7(b).
[2] 11 New York Codes, Rules, and Regulations 216.4 through 216.6.
[3] 11 New York Codes, Rules, and Regulations 216.7.
[4] Florida Statute 627.736(4)(b).
[5] Florida Statute 634.336(5)(c)(5).
[6] Caitlin Cahalan and Lauren Hamer, “How Many Car Insurance Claims are Filed Each Year? 2024,” Consumer Affairs (Feb. 22, 2024).
