Do insurance companies have certain time limits to conduct an investigation?

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Do insurance companies have certain time limits to conduct an investigation?

It seems that the insurance companies drag their feet in investigating accidents. Is there a time limitation for adjusters or investigators to take statements or gather evidence or get releases from people who are seeking medical treatment?

Asked on March 22, 2009 under Insurance Law, Alabama

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 12 years ago | Contributor

Insurance companies are subject to the Unfair Claims Practices Law in each state in which they do business. 

Under the unfair claims practices laws, and the rules promulgated by each of the various State Insurance Departments, insurance companies are bound to act promptly. In some states and circumstances there also are specific time limits for certain actions to occur, although very often the deadline nature of the time limit is not absolute, as the rules allow insurance companies to take more time "where necessary or appropriate."  Thus in any given circumstance things may take longer than target, as the rules focus on the average situation, not each and every specific case. 

Good insurance companies do act promptly, and do not drag their feet, particularly when dealing with claims of their own insureds. They own their own insureds a duty of good faith.  However, some insurance companies seem to be guilty of dragging their feet as a matter of practice. 

When it comes to claims of 3rd parties against the person the insurance company insures, things get a bit different. The duties owed by insurance companies to 3rd party claimants is different. The 3rd party os typically an adversary of the insured.

It also is in the interest of insurance companies to gather the facts of accidents promptly, at least so as to protect their own interests, as with the passage of time peoples memories fade. However, one person's "promptly" can be another person's "foot dragging."

 


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