For what reasons can an auto insurance company legitimately delay a settlement?

I was involved in an accident 9 months ago. The other driver was at fault and was ticketed. His insurance company contacted me immediately and assumed responsibility for all payments including pain and suffering. There were 3 other occupants in the car and all 4 of us were treated at the emergency room of a local hospital. My wife was diagnosed with a broken sternum and admitted overnight for observation. The rest of us were released, although my wife’s sister was in severe pain with bruising to her rib-cage. To make a long story short, I notified the insurance company the next month that my wife was

through with treatments at which time we began the process of signing HIPPA

agreements and submitting bills. Since then there have been numerous delays by my adjuster for missing and lost paperwork, which I have taken the time to

overcome each. The latest is that they will not offer my wife a settlement

because her sister is still receiving physical therapy. They want to wait until

all medical bills from all occupants of the car have been received. Their

excuse was they want to protect their insured to be sure claims are within the

limits of his policy. Is this a legitimate reason to withhold payment to my wife?

Asked on March 28, 2018 under Accident Law, Illinois

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 2 years ago | Contributor

The problem you face is that the other driver's insurer is the *other* driver's insurer--not yours. This insurer owes no obligation directly to you: their obligation is to their insured (to defend them in court; to pay judgments against them, up to the limits of the policy). Often, they will voluntarily pay without a lawsuit or litigation, if they believe that under the circumstances, that is most cost effective, but such a payment, in the absence of suing their insured and winning, is voluntary on their part. Since it is voluntary on their part, they can delay paying if they want (or even refuse to pay), such as, for example, if they are waiting to see that ALL bills have come in.
The only way to force payment would be to sue the at-fault driver in court and win, getting a judgment in your favor. That will itself take time and cost money, and so while your ultimate recourse, is something to do only when it is clear you will not otherwise be paid. You may wish to write to the insurer and let them know that if they will not pay, you will have to consider litigation; perhaps that will encourage them to finally make the payment(s).


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