An insurance company must either settle or deny a claim in California within 40 days after receiving the proof of claim, according to the California Department of Insurance. A proof of claim is documentation and other evidence about the claim.
Under the Fair Claims Settlement Practices Regulations guideline that California follows, an insurance company must settle a claim immediately, if possible. If it can’t settle it immediately, it must do so within 40 days of receiving the proof of claim forms. Eighty-five days is the maximum time California allows for processing and making the final payment.
Here is how the 85 days break down:
The insurance company must acknowledge your claim within 15 days after you communicate with its representative and send you the forms you need to complete and instructions on how to complete them. One of the most significant forms is a proof of claim, also called a proof of loss.
- After the insurance company receives your completed proof of claim forms and all the required supporting documents, it must decide on your claim within 40 days.
- After settling your claim, the insurance company must make a final payment within 30 days if it approves your claim.
If the insurance company violates these rules, you could file a lawsuit alleging bad faith on its part. If your lawsuit is successful, the insurance company might have to pay you interest and penalties in addition to your settlement amount.
Duties of the Insurance Company Under the Fair Claims Settlement Practices Regulations in California
The fair claims settlement practices regulations in California impose additional duties on insurance companies when handling claims. Here are a few examples of those requirements:
- You should receive communication from the insurance company’s claim representative within a reasonable time after you report the loss. Sometimes, the insurance company can wait a little longer before responding to you. However, in no event should it wait more than 15 days. Reporting the loss can, initially, be as informal as a phone call or email to the insurer.
- Whenever you contact the insurance company during the claims process, it should respond to you within 15 days. The response should be immediate, with 15 days being the absolute limit.
- The insurance company is supposed to perform these tasks during the initial 15 days after you report the claim: acknowledge your claim, start their investigation, provide the forms and instructions you need, and provide you with reasonable assistance.
- The deadlines of the insurance company under the Fair Claims Settlement Practices Regulations in California do not intend to provide an unreasonable time for insurers to start doing their work. The insurance company should start processing your claim immediately.
- You must read the fine print when you settle your claim. For example, determine if the settlement for a total loss must include taxes, license fees, and transfer fees.
- Any deductions the insurance company tries to make from the settlement must be “fair, measurable, and discernable,” according to the Fair Claims Settlement Practices Regulations. For example, if you elect to retain the vehicle after the insurance company designates it as a total loss, the insurer can only deduct a reasonable salvage value that is the equivalent of a comparable vehicle of like kind and quality.
If you reach a claim settlement and you agree to its terms, you should still have a lawyer read over the documents to protect your rights. Sometimes, representatives from the insurance company try to get people to sign away more rights than they should.
Your Options If You Are Not Satisfied With How the Insurer Resolves Your Claim
You might not have to accept the result if the insurance company wrongfully denied your claim or refused to pay you the money you think you deserve for your claim. You could sue the negligent party that caused your injuries. You would have to deal with their insurance company again, but they would be more likely to take your claim seriously.
The most significant danger to your claim at this point is something called the statute of limitations. Every state has a statute of limitations that sets the deadline by which people must file different types of lawsuits. In California, under CCP § 335.1, you generally have two years to file a personal injury or wrongful death lawsuit.
If your claim is against a government entity like a municipality, your deadline is even shorter. If you wait too long, California law will prevent you from going after the at-fault party for compensation for your injuries and other losses.
Greenberg Gross Can Help You With a California Insurance Claim
Greenberg Gross could fight your battles for you if you suffered an injury in an accident or event that was someone else’s fault. You can contact us today to get started. We can review your options and next steps and answer your questions about how long an insurance company has to settle a claim in California.