How Long Does an Insurance Company Have to Settle a Claim?

A car accident insurance policy paper sitting under keys and a car fob

When you’re hurt in a car accident in Florida, your bills can pile up quickly. You likely have medical bills, property damage, and lost work. You may have lost your mode of transportation. It isn’t long before it can seem overwhelming. Fortunately, Florida’s no-fault insurance laws are there to protect you, and there’s a good chance that there’s an insurance policy that covers your losses.

You might wonder how long the insurance company has to settle a claim in Florida and whether you will need to work with a car accident lawyer to get the compensation you need. Here’s what you should know about how long an insurance company has to settle a claim.

How Long Does the Insurance Company Have to Settle a Claim in Florida?

The exact answer to how quickly the insurance company has to settle a claim in Florida is that it depends on the type of the claim. Florida has laws that apply to all car accident insurance policies and laws that apply specifically to personal injury protection PIP (no-fault) claims.

For a general insurance settlement, the insurer just has to investigate and pay or deny the claim within a reasonable period of time. For a PIP claim, the insurance company has 30 days to pay or deny the claim.

Related: Do’s and Don’ts of Car Accident Insurance Claims in Tampa, FL

General Insurance Claims

There’s no hard-and-fast rule for how long an insurance company has to settle a claim when it’s not a PIP claim. Instead, the insurance company has a reasonable period to affirm or deny coverage. It’s considered an unlawful, deceptive trade practice under Florida law 634.336 for an insurance company to fail to accept or reject a claim within a reasonable period of time after a claimant submits proof of loss. If the insurance company denies a claim, they must give a reason for the denial. It’s also a deceptive trade practice to misrepresent the facts, lie about the insurance coverage or to fail to communicate promptly during the claims process.

If the parties agree to a settlement, Florida law 627.4265 requires the insurance company to pay the claim within 20 days. The parties may condition the payment on requiring the claimant to submit a release of their claims in exchange for payment. If the insurance company doesn’t pay by the due date, they owe the claimant 12 percent annual interest. Because auto accident settlements can be significant sums of money, a 12 percent annual penalty can add up quickly if the insurance company doesn’t pay the claim on time.

PIP Claims

The rules for PIP claims are more clearly defined than the rules for other types of insurance claims. The first deadline is yours — you must seek medical treatment within 14 days to submit a claim for PIP benefits. Once you submit your claim, Florida law 627.736(4)(b) says that the insurer must pay or deny the claim within 30 days. If you don’t have all of the information to submit the entire claim at once, the insurer has 30 days to pay the claim after they receive each part of the claim.

If the insurer denies a claim, they must give an itemization of the denials. If the rejection is because of a clerical error by the client, the insurance company must provide an explanation. In that case, the client has 15 days to submit a revised claim.

Related: How MedPay/PIP Insurance Can Help You After a Car Accident

The Mailbox Rule for Making Payment

For the purposes of paying PIP benefits within 30 days under Florida Statute 627.736(4)(b), the mailbox rule applies. The insurance company complies with the 30-day standard when they put the settlement check in the mail. It doesn’t count just to put the settlement check into their own intra-office mail system.

It’s also not enough to authorize payment on the 30th day and then wait for the accounting department to cut a check. Instead, the insurance company needs to put the check into the actual mail system by the 30th day. Then, if it takes a few days to get to the recipient, the insurance company is still in compliance with the law.

How Does the Insurance Company Determine What to Pay When the Vehicle Is a Total Loss?

Florida law 626.9743 gives some guidelines for how the insurance company must value a vehicle when they’re determining a fair value for the total cost of a car. The insurance company may look at recent sales for comparable vehicles in the area. They may also get quotes from reputable, licensed dealers in the area. Finally, they may turn to a guide like Kelley Blue Book to determine the value of the damaged vehicle.

Why Are the Rules Different for PIP and Regular Insurance?

In theory, a PIP insurance claim shouldn’t require an inquiry into fault. The damages should be covered regardless of who caused the accident. The insurance company’s investigation should be limited to whether coverage applies and the amount of damages.

For a general insurance claim, fault might be an issue. If fault might be a question in whether insurance coverage applies, the insurance company may need more time to investigate the claim. What’s reasonable depends on the circumstances of each particular case.

What Happens When the Insurance Company Doesn’t Pay As They Should?

If the insurance company doesn’t follow the rules for accepting or denying a claim within the required period of time or within a reasonable period of time, you may have a claim for bad faith. The insurance company might have to pay you extra because they didn’t do their part to fairly investigate and pay the claim.

Related: Understanding Bad Faith Laws in Your Car Accident Claim

In Florida, bad faith insurance laws come from both Florida law 624.155 and Florida’s common law. In addition to compensation for bad faith on the part of the insurance company, you also have the option to bring a claim in a court of law in order to compel the insurance company to pay you. You have four years from the date of the accident to bring your claim.

How a Car Accident Lawyer Can Help

If the insurance company isn’t treating you fairly, contact Jack Bernstein, Injury Attorneys. Our skilled legal team understands common insurance company tactics and will fight to ensure your rights are protected under Florida law.

If you need help dealing with your insurer after a car accident, call us at (813) 333-6666 or fill out our contact form to schedule your free case evaluation. There is no fee unless we win.