Why Do Insurance Companies Delay Paying Valid Claims?

When an individual gets into an accident in Colorado, the assumption may be that an insurance company will pay for resultant medical expenses and property repairs. Unfortunately, insurance carriers are practiced at protecting their profits. Insurers may use various tactics to save money on claim payouts, including intentionally delaying the processing or payment of a valid claim.

They Hope the Claimant Will Give Up

One reason an insurance company may intentionally delay paying a valid claim is in the hopes of waiting out the claimant’s patience. An insurer may delay the processing of a claim to frustrate the accident victim enough to drop the case.

An insurance company knows that claimants are already dealing with a lot of stress if they have suffered physical injuries or property damage. Delaying the claim is meant to add to this sense of frustration until the claimant simply gives up.

They Want the Claimant to Accept a Lowball Settlement

Insurance companies are for-profit businesses. They protect their own financial interests by attempting to convince claimants to accept settlements that are as low as possible. Delaying a claim is another tactic to save money on payouts.

An insurance company hopes that if it makes a claimant wait long enough, he or she will accept any settlement offered just to end the case and get a check – even if the settlement far undervalues what the claim is worth. Many claimants are desperate enough for money after serious accidents that they do not want to wait or respond with counteroffers to delay payments even further.

Insurance companies capitalize on this knowledge to convince claimants to accept inadequate or lowball settlement offers by delaying claims as much as they can. Resisting the urge to jump at a fast settlement is important if a victim wishes to receive a fair offer.

They Wish to Maximize Profits

Another way claim delays can benefit insurance companies is through interest. The longer an insurance company goes without paying a claim, the more interest it will accumulate on premiums paid by policyholders. By withholding funds, insurers can earn more interest. A delay can also temporarily improve the company’s cash flow situation, which can help investors.

They Want to Run Out the Clock

Insurance companies know that injured accident victims only have a limited amount of time in which to file personal injury claims. Forcing a claimant to wait could be a tactic to run out the clock so that the victim loses the right to pursue financial compensation through a lawsuit. In Colorado, the filing deadline or statute of limitations on most accident cases is two years.

How Can a Personal Injury Lawyer Help?

While some insurance delays are reasonable, such as an extended investigation to ensure the proper handling of a claim or to verify that it is not fraudulent, others arise from an insurance company trying to take advantage of a claimant and save money. In these situations, a Denver personal injury attorney may be necessary to hold an insurer accountable.

You can trust an attorney to take over communications with an insurer on your behalf. If the insurance company does not have a lawful reason to delay the payout of a valid claim, your attorney can pressure the insurer to offer fair payment. If necessary, your lawyer can take the insurance company to court in Colorado to argue your case.

For more information about a recent insurance claim delay in Denver, contact Fang Accident Lawyers for a free case review.