At the best of times, an insurance company will respond to your demand letter within 30 days. However, it is not uncommon to wait anywhere from a few weeks to a couple of months as there is no legal requirement for a deadline. You can set a deadline for receiving a response in your demand letter, but there is no guarantee that the insurer will meet it. Once the insurance company has accepted a claim, meaning that an agreement has been reached between the insurance company and the claimant, the insurance company is legally obligated to make the final payment within 30 days.
If appropriate, your attorney can file a personal injury lawsuit against the policyholder or, in the case of a car accident, against the at-fault driver to demonstrate to the insurance company that you are serious. However, if your state has no laws regarding the length of time an insurer has to settle a claim, you probably have no reason to file a lawsuit. If you were not responsible for the accident, follow the steps above and file a claim with the responsible party's insurance company. This is when, if everything goes as planned, the insurance company must recognize the policyholder's legal liability and pay out the claim immediately. Therefore, your insurance company is required to make a payment when you experience a loss that is covered by the terms of the policy.
You and your lawyer cannot force an insurance company to respond to a demand letter, but you can take some steps to help speed up response time. Insurance companies and their appraisers have strong incentives not to pay out full value of a liability claim and not do so quickly. Ultimately, filing a lawsuit with a liability insurance company is done in order to convince them to pay out the claim without having to bring it to trial. Insurance companies must process claims professionally and efficiently or they risk being accused of bad faith. But what does this mean? What is considered a “reasonable amount of time” for an insurance company to settle a car accident claim? When an investigation related to your claim is necessary, which is usually the case with claims filed under someone else's liability policy, it may take longer for you to learn about their decision.
Lying on your car insurance application is considered fraud and can lead to additional consequences if you get caught.