Why Do Insurance Companies Delay Paying Valid Claims?

man looking at watch in front of computer with caption: "Why Do Insurance Companies Delay Paying Valid Claims?"

Understanding how insurance claims work after a car accident is critical, as it can affect not only your immediate recovery but also your long-term financial health. Facing an insurance company that delays payment on a valid claim adds frustration to an already stressful situation. Learning more about why and how they delay valid claims can help you get what you’re entitled to.

If you’re experiencing these issues, a Las Vegas car accident attorney can provide the assistance you need to ensure your claim is handled properly. Here are some of the reasons your valid claim may be denied or delayed:

Incomplete or Inaccurate Information

One of the most prevalent reasons for claim denial or delay is the submission of incomplete or inaccurate information. Insurance companies rely heavily on the details provided to assess the validity and scope of a claim. Missing documents, incorrect information, or inconsistencies in the submitted paperwork can lead to significant delays as the insurer requests clarification or additional evidence. In some cases, these discrepancies can result in a complete denial of the claim.

Failure to Adhere to Policy Terms

Insurance policies come with terms and conditions that policyholders must abide by. Failure to comply with these terms, whether knowingly or unknowingly, can lead to denial or delay of a claim. This can include not reporting the incident within the stipulated time frame, not seeking prompt medical attention for injuries, or using a non-authorized repair shop for vehicle damages. Insurers use these policy requirements to ensure that claims are valid and justified.

Suspicion of Fraud

Insurance fraud is a serious concern for insurers, leading them to meticulously scrutinize claims for any hint of fraudulent activity. If an insurance company suspects that a claim is exaggerated or fabricated, they will engage in thorough investigations, which can delay the claim process significantly. In severe cases, suspicion of fraud can lead to the outright denial of a claim and possible legal repercussions for the policyholder.

Insufficient Evidence

Providing insufficient evidence to support a claim is another common reason for delays or denials. Insurers require comprehensive and convincing documentation to validate the claim amount and its legitimacy. Lack of sufficient medical records, repair estimates, or photographic evidence can hinder the claims process, prompting insurers to request more information and delaying the resolution of the claim.

Pre-existing Conditions or Policy Exclusions

If an insurer determines that the damages or injuries claimed are linked to pre-existing conditions or fall under policy exclusions, they may deny the claim. Most insurance policies have clauses that exclude certain types of coverage, such as damage due to wear and tear or pre-existing medical conditions not disclosed during the policy initiation. Identifying these exclusions often causes delays as insurers need to verify the conditions and their relevance to the claim.

Bad Faith Practices

Bad faith practices occur when an insurance company does not act in a fair and honest manner towards a policyholder during the claims process. This can include deliberately delaying the investigation, undervaluing the claim without a valid reason, or outright denying a claim that should be covered according to the policy terms. Bad faith can have severe consequences for the insured, often leading to significant financial and emotional distress.

In instances where an insurance company is found to have acted in bad faith, policyholders may have legal recourse to seek compensation.

The Importance of Working with a Personal Injury Lawyer

Dealing with insurance claims is often a complex and nuanced process that can become even more challenging when you’re recovering from an accident. This underscores the importance of working with a Las Vegas personal injury attorney when handling your insurance claim.

Having strong legal representation means having someone in your corner who knows how insurers operate – they’re familiar with common delay tactics, low offers, or outright denial maneuvers companies use and how to respond accordingly.

If you have questions or need help, contact us today to schedule a free consultation.

Awards & accolades