An insurance company has 10-45 days to settle a claim in most states, and it takes about 30 days on average to settle a car insurance claim. For instance, insurers in New York must pay a claim within 35 business days, while Virginia insurers must settle a claim “reasonably promptly.”
Insurance companies always have to follow state laws, which are sometimes divided into separate timeframes to acknowledge a claim, decide on a claim, and pay a claim. The table below lists the total amount of time that an insurer has to complete the process.
How Long Car Insurance Companies Have to Settle a Claim by State
While you’re waiting for an insurance claim to be settled, you can help speed up the process by responding quickly to any requests for information.
If your claim is taking too long to settle, you have several options. You can start by directly asking your insurer what is causing the delay. If you don’t receive a satisfactory response, you can reach out to your state’s insurance regulator for help. And if you believe your insurer is acting in bad faith, you might want to hire an attorney.
It usually takes 30 days for insurance to pay out after a car accident. Most car insurance companies try to resolve accident claims as quickly as possible, which typically leads to a payout within a month of a claim being filed. However, it might take longer depending on several factors, including the state, the type of claim being filed, and the severity of damage or injuries.… read full answer
Some states have specific laws dictating how long an insurance company has to make a ruling and pay out on a claim. For example, insurers in California have 40 days to accept or deny a claim and 30 days to issue payment once the settlement has been accepted. And in Texas, insurers must decide on a claim within 45 days and make the payment within five days of approval.
Not all states provide exact timeframes, though. In Massachusetts, for example, insurance companies must pay claims where fault is clear within a “prompt and reasonable” period of time.
Factors That Affect the Claim Timeline
State timeframes for insurance claims (some states are stricter than others)
Type of claim being filed (bodily injury takes longer than property damage)
Extent of physical damage or injuries (severe accidents can take a long time to settle)
Communication between drivers, insurance companies, and adjusters (slow communication delays the claim timeline)
Understanding of policy and coverage (you might think your policy covers you in a situation when it really doesn’t)
Ability to pay insurance deductible (your insurance company won’t pay out until you’ve paid your deductible)
In particular, the type of claim being filed and the extent of the physical damage or injuries involved can significantly impact the payout timeline. Bodily injury claims take the longest to settle because multiple parties are involved, including your doctor, the car insurance company, and your health insurance provider.
Injury settlements usually have to wait until the patient has reached the point of maximum medical improvement (MMI). This is when an individual has made a full recovery or has a full assessment of the extent of their injuries and the expected long-term medical costs. If it takes longer than 30 days for the patient to recover, then the settlement could be pushed back.
Conversely, a straightforward property damage claim where fault is clear can be settled in as little as two weeks.
If Your Insurance Company Is Not Cooperating
Even if your state doesn’t have specific laws establishing a claims timeline, you still have the right to be paid quickly and efficiently by the insurance company. If your insurance company is acting in an unethical manner and delaying payment without a clear reason, you can file a “bad faith” lawsuit. In addition to your original settlement amount, you could be paid extra for interest and penalties.
Yes, you can keep car insurance money from a car accident, rather than using the money for repairs, if you own your car outright and the insurance company did not pay the mechanic directly. Depending on the details of your insurance policy, you may not be required to use your … read full answerclaim settlement check to repair your car. But you should keep in mind that if you don’t repair the damage and it results in subsequent problems, your insurance provider may consider you to be negligent and deny you coverage.
Even if you own your car outright and your insurance company sends you a direct payment, you still need to check your policy before you decide to keep the money. In some cases, your insurer may not allow you to keep your collision or comprehensive coverage if you don’t get your car repaired. Violating the terms of your policy to keep the payment could also constitute insurance fraud, so you should always check before you decide to spend the money elsewhere.
In other words, not every driver is eligible to keep the money from a car accident insurance settlement, and in some cases, doing so could cause problems with your insurer and your lender or lessor.
When You Can’t Keep the Money From a Car Accident
If you take your car to an insurer-approved body shop, your insurance company will likely send the payment directly to the mechanic.
If your car is leased or financed, your agreement likely requires you to keep the car in working order, so you are obligated to fix it.
If the check includes both your name and your lender’s or lessor’s name, you will need their approval before you cash it.
If your policy prohibits it, you can’t keep the money from a car accident.
Keeping a Car Accident Check From the Other Driver’s Insurer
If the accident was caused by another driver, you will usually receive a direct payment from their insurance company. Because you are not that insurer’s customer, they will not require you to spend the money a certain way. However, your lender’s or lessor’s rules will apply to all insurance claims, regardless of which insurer is involved.
Keep in mind that if you choose not to use the settlement money for repairs, you’re risking additional consequences in the future. If the damage to your car causes other issues down the line, they won’t be covered by the at-fault driver’s insurer or your own policy.
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