When you file a claim seeking financial compensation for your medical bills, property damage or other losses after an accident in Arizona, you should expect to hear back from the insurance company promptly – within a reasonable amount of time. Unfortunately, not all insurance companies obey their deadlines. Some negligently or intentionally delay the processing of a claim in an effort to save money on payouts. Find out how long an insurance company has to settle a claim in Arizona under state law to better protect your rights as a claimant.
What Is the Arizona Unfair Settlement Practices Act?
Arizona’s Unfair Settlement Practices Act is codified in Arizona Administrative Code Section 20-6-801. This law imposes rules and regulations that insurance companies must obey when processing claims. It includes deadlines that insurance companies have for responding to claims and accepting or rejecting them. In general, an insurance company must respond to a claim and make a decision on it within about 45 days of receiving the claim. It may have more time, however, for a complicated investigation.
The specific insurance company time limits listed in the act are as follows:
- Ten working days to acknowledge the receipt of a claim (typically, by sending a letter of receipt to the claimant) unless the insurer makes the payment within this period of time.
- Ten working days to make an appropriate reply to all other pertinent communications received from a claimant that reasonably need a response.
- Fifteen working days to send a notice of receipt of an inquiry sent by the Arizona Department of Insurance.
- Ten working days of notification of a claim to provide all necessary claim forms and instructions to the claimant.
- Thirty days upon notification of a claim to complete the insurance company’s investigation unless the insurance company requests an extension with a valid reason.
- Fifteen working days after the insurance company receives the claimant’s proof of loss forms to notify the claimant whether the claim has been accepted or denied.
If an insurance company requests an extension, it must do so within 15 working days of receiving the proof of loss forms. It must then continue to send a letter to the claimant every 45 days explaining why more time is needed for the investigation. If an insurance company misses any of these state-mandated deadlines, it could face penalties. It is the insurance company’s duty to promptly respond to and resolve claims.
Why Might an Insurance Company Delay Your Claim?
Insurance companies operate as for-profit businesses. This can lead to challenges and obstacles while trying to make a fair recovery as a claimant. One tactic often used by insurance companies is unreasonable delays. An insurance company may intentionally take as long as possible to respond to a claim, investigate the accident or offer a payout in an attempt to wait the claimant out. Delaying a claim increases the odds of a claimant jumping to accept the first settlement that is finally offered. Unfortunately, this settlement is often much lower than the claimant deserves.
What Should You Do if You Suspect Insurance Bad Faith Delay Tactics?
If you recently filed an insurance claim in Arizona and still have not heard back from the insurance company after the deadline imposed by the Unfair Settlement Practices Act has passed, contact a personal injury attorney as soon as possible. You may be a victim of insurance bad faith.
Bad faith is a type of tort, or wrongdoing, committed when an insurance company does not handle a claim in an honest or good faith attempt to resolve it. As a victim of bad faith, you may be entitled to compensation not only for your original claim, but also for the insurance company’s mistreatment of you. A lawyer can help you understand and protect your rights if you’re dealing with unreasonable insurance claim delays.