How Long Does it Take Insurance Companies to Pay Out a Claim?

Personal Injury | April 5, 2021

If you qualify for financial benefits after a personal injury accident, you may want to receive your insurance settlement check as soon as possible. You are most likely dealing with expensive medical costs and wish to start moving forward. The length of time it will take an insurance company to pay out your claim, however, will depend on the unique factors of your case.

California Law: How Long an Insurance Company Has to Respond

Like most states, California has a law that restricts how long an insurance company can take when responding to claims. State law says that insurance policyholders are entitled to prompt and timely communications from the insurance company. California gives insurance companies 15 calendar days to issue an initial response after receiving a claim.

In addition, an insurance company has 40 days to investigate and decide whether to accept or reject a claim. If an insurance company needs more time to process a claim, it can request an extension with a valid reason. With an extension, the insurer must communicate with you about your claim every 30 days until it is resolved. Once you and the insurance company agree upon a settlement, the insurer has 30 days to issue a payment.

Factors That Slow Down or Speed Up the Process

Even with California’s deadlines in place, how long your insurance claim takes to result in a payment depends on factors unique to your case. Factors that can present challenges and add time to your claim include liability disputes, the comparative negligence defense and mistakes made on your claim. These issues can make it take longer for an insurance company to process your claim. Factors that could speed up the process include having an attorney handle legal matters for you and documenting your losses on your own as much as you can.

Calculating Pain & Suffering in California

Lump Sum vs. Structured Payments

The type of settlement payment plan you choose will also impact how long it will take to achieve full financial recovery from an insurance company. There are two options for how you can receive your payment after accepting a settlement from an insurance company: a lump-sum payment or a structured settlement.

A lump sum means you will receive the full settlement at once. A structured settlement means you will receive the total award in smaller payments made to you over time. If you choose a structured settlement, it will take longer for you to receive the full settlement – sometimes, years. However, this may be the right option if you wish to ensure your settlement will pay for your bills for months or years to come.

When Should I Accept a Quick Settlement Offer From an Insurance Company?

Although it can be frustrating to wait to receive a settlement from an insurance company, it is worth it to take the time to be certain that you are resolving your claim for an adequate amount. Accepting a quick settlement offer may be appealing timewise, but it can put you at risk of accepting less than you deserve for your injuries and related losses.

The initial settlement offered by an insurance company often does not fully represent the victim’s losses. The insurance company expects to negotiate back and forth for a higher settlement amount. If you accept the first offer in an attempt to rush your claim, you put yourself at risk of accepting too little. Once you say yes to a settlement, you generally cannot renegotiate for a higher amount.

Do I Need a Personal Injury Attorney?

A personal injury attorney can help during your claim in many ways, including cutting time off of your claim by avoiding common mistakes and handling the legwork of your settlement efficiently. Your lawyer can speed up the claims process as much as possible without putting you at risk of accepting an inadequate offer.

Discover the ways a personal injury attorney in Southern California can help you by requesting a free consultation at The Ryan Law Group today.

During the COVID-19 crisis, The Ryan Law Group is open for business and continues to be available to existing and new clients through virtual meetings and teleconferences. We can handle all of your legal needs without you leaving your house. Please, call (310) 321-4800 or contact us here to be connected to our attorneys who can get to work on your case.