A Texas law firm that performs insurance defense work admits that delaying claims is a strategy used by some of its clients. In an article sent to me by many people, the law firm posted on its website blog:
In February 2022, it was reported that more than 10% of all insurance claims related to the infamous Texas freeze were still unresolved. This led to widespread allegations that insurance companies intentionally delayed claims. But why would insurance companies even want to do this? Why is it beneficial for insurers to delay this process as much as possible? If you are dealing with an insurance claim, should you delay as long as possible?
If you are looking for effective insurance defense strategies, your best bet is to book a consultation with a team of qualified insurance defense attorneys. These lawyers can assess your unique situation and determine the best way forward. The truth is that there are many potential strategies for defending an insurance claim, and postponing it for as long as possible may not be the most effective choice for you. When you talk to a qualified insurance lawyer, you can get legal advice tailored to your specific situation.
The benefits of deferring a claim
Companies that postpone complaints can experience a number of benefits. First and foremost, policyholders are putting pressure on them to postpone a claim. These people may be dealing with bills for property damage, legal fees and medical expenses. Most people can not afford to continue fighting against insurance companies for a long time. This means that most plaintiffs will be forced to settle for a favorable amount instead of continuing to negotiate with insurance companies for a longer period of time. In other words, policyholders are forced to accept lower settlement offers.
Delays with complaints can reduce costs in other ways. For example, when an insurance company is facing a deluge of claims, they can defer some of them to avoid mass payments at once. This limits the financial stress on these organizations and it allows them to invest funds from paid premiums to earn interest income and offset some of the costs. This is likely to be one of the main causes of continued delays related to the Texas freeze.
Avoid Bad Faith processes
With all this said, you need to be very careful about how you delay claims. If you are continuously delaying in an unreasonable way, you may be faced with a lawsuit in bad faith. This is why it is so important to work with a qualified lawyer and defer claims in a legal and correct manner rather than open up for further financial losses.
Get help from a qualified lawyer today
For help from our skilled Brownsville insurance attorneys, contact Colvin, Saenz, Rodriguez & Kennamer, LLP Over the years, we have helped many organizations defend themselves against insurance claims effectively. While it is true that delaying your claim for as long as possible can yield positive results, you need to approach this situation carefully to avoid legal consequences. In addition, there are other strategies you may want to consider. Book a consultation today and we can discuss all your legal possibilities in more depth.
Delays in insurance compensation are against the law. Insurers can be fined and licensed adjusters can receive disciplinary fees for intentional delay in reporting claims. Delays in claims are not a legal strategy. This is what all lawyers ̵1; who must ethically uphold the law – should tell their clients. We have written a lot about that delay in claims is the policyholders’ main enemy.
IN Delay of claims 101we noted:
There are several reasons why insurance companies postpone claims settlement, but they all seem to relate to one thing – an increase in corporate profits. First, most unrepresented policyholders will give up a claim or settle a claim for pennies on the dollar if the insurance company drags on long enough. Winning this war of attrition against unrepresented policyholders repeatedly is, of course, very profitable for insurance companies. Second, insurance companies benefit from accrued interest and investment gains on withheld benefits. This is also very profitable for the insurance companies.
Delays in claims settlement / investigation process are quite common. It is also quite common for the carrier’s delay to continue in litigation. In fact, the commenter on my post on November 15 spoke about such things – “the company is suing the insured to postpone and then releasing its claim and still not paying.” Although it is common for insurance companies to continue to delay litigation, it seems that an insurer’s litigation all too often plays second fiddle to an insurer’s claims adjustment / investigation conduct in bad faith. Let’s not forget that an insurance company’s litigation is a fair game in bad faith, and potentially as important as claims handling behavior.
Twelve years ago, I noted that insurance companies are the subject of market conduct investigations where delays are central to, How profitable and common is it not to find damage and delay by insurers?:
Insurance departments throughout the United States conduct regular investigations into insurance companies’ claims documents. These are known as market research. The Claims Spot recently noted in 5 claims Issues Cited for Non-compliance on Market Conduct Exams & 3 Tools to Avoid Them, recurring erroneous claims practices from insurance companies since 2006 that are not corrected by the insurance industry. The marked incorrect methods were listed and then declared to be correctable with “basic” measures:
Failure to acknowledge, pay or deny claims within specified time frames
Failure to pay claims correctly (sale, tax, loss of use)
Incorrect documentation of claim documents
Failure to notify in writing of a delay in the settlement of damages
5. Use of unlicensed claims settlers or valuers
All these findings could have been avoided with the application of best practices and an internal review process. With a few basic steps, a company can minimize or eliminate the risk of not meeting the requirements.
Delay of claim is illegal. It should never be a strategy used against an insurer’s clients before or after litigation. Insurance attorneys should not engage in this unethical behavior or promote it as a strategy.
You can delay, but time will not come.