Why Do Car Insurance Companies Delay Paying Valid Claims?

After a car accident, your first step to compensation often begins with an insurance claim. Many people expect that this process will lead to swift and fair compensation, but the reality is that insurance claims can take a long time to process. In some cases, insurance companies may employ various strategies to delay paying valid claims—often to minimize payouts.

#1: The Longer Your Claim Takes, the More Likely You Will Accept a Low Offer

Insurance companies understand that the longer they delay your claim, the more desperate you might become for compensation. This tactic is often used to pressure claimants into accepting lower settlement offers than they might be entitled to. 

As medical bills and repair costs mount, the immediate need for financial relief can make even an unfair offer seem appealing. However, accepting a low settlement can lead to financial hardship in the future, so it is best to wait.

#2: You Will Have Less Time to File a Personal Injury Lawsuit

Insurance companies know that there are statutory time limits, known as statutes of limitations, within which you must file a car accident lawsuit if you pursue legal action beyond an insurance claim. By delaying the processing of your claim, insurers can push you closer to this critical deadline. The closer the deadline, the less time you have to consult with an attorney and prepare a comprehensive case, potentially leaving you with no option but to accept the insurance company’s offer.

#3: They Make More Interest Off of Premiums by Delaying Claims

Another reason for delays is purely financial. The longer an insurance company holds onto its money, including premiums collected from policyholders, the more interest it can earn on those funds. Delaying claim payments is a strategy that allows insurers to maximize their investment returns; all the while, claimants are left waiting for the funds they need to recover from their losses.

#4: They Hope That You Will Eventually Give Up on Your Claim

Some insurance companies delay claims processing hoping that claimants will give up. Faced with a lengthy and complex claims process, some people may decide that pursuing their claim is not worth the effort and emotional strain, especially if they are also recovering from serious injuries.

#5: They Aim to Maximize Their Profits and Protect Your Bottom Line

Ultimately, the insurance business model focuses on maximizing profits. Every dollar not paid out in claims is a dollar that contributes to the company’s bottom line. Insurance companies can increase their profitability by employing strategies that reduce the amount they pay out on claims—including delays. Speak to a car accident lawyer in Louisville today to learn more.

Protect Your Rights—Contact Sam Aguiar Injury Lawyers Today

Delays in insurance claim processing can exacerbate the stress and financial strain following an accident. Sam Aguiar Injury Lawyers is familiar with the reasons behind these delays and knows how to prompt action from insurance companies. 

If you’re experiencing delays with your car insurance claim, trust our Louisville personal injury attorneys to intervene on your behalf. Contact us today to learn how we can expedite your claim and secure the compensation you’re entitled to.