One of the most frequent complaints is that insurers do not pay or pay late. Do you know how long the insurance has to pay a claim? The key is to know what they are …
Nine, eight, seven, six … The countdown has begun. In a few days, the deadline to collect the compensation is met. Or not? Because you know how long the insurance has to pay a claim.
One of the most frequent complaints is that insurers do not pay or pay late.
And the question is if they have to pay when do they have to? The answer should be obvious: as soon as possible, immediately.
But the thing is not so simple and one of the keys is to know what the obligations of each of the parties are. So in this article, I am going to explain what you have to do so that the insurer pays you since it is exposed if it does not do it within the established deadlines.
Without further ado, let’s go for it!
What is the insurance business?
An insurer is a financial entity, with the capacity and duly authorized to carry out the insurance activity. This includes assuming the obligation to pay an amount of money, or provide a service when the event occurs whose risk is covered, and all this in exchange for receiving the amount of the premium established as the insurance price.
The insurance contract (the policy) is the financial instrument in which the insurer sets out its commitment to pay in the event of the loss. This can give you an idea that it is an adhesion contract, where it is the insurer who establishes its conditions. Conditions regulated in Law 50/80 of the Insurance Contract, whose precepts are imperative.
You suffer a car accident and your insurer will provide you with the necessary assistance, assess the damage to the vehicle, and will compensate you or repair it, if applicable. So far everything seems very simple, the problem arises when we ask ourselves how long does it take to resolve the claim?
How long does insurance have to pay a claim?
The truth is that current legislation does not leave the answer to this question to chance. If things go well, you should have no problem receiving insurance benefits or collecting compensation. But if things go wrong, knowing what the deadlines are is a guarantee that the rules are met and that your rights as an insured are respected.
However, it will depend on the type of insurance that is affected by the loss so that the terms vary. Thus, for example, it is not the same that you are the injured party in a traffic accident as the beneficiary in a life policy. You will see why later.
What are the obligations of the insured towards the insurer?
For the insurer to have to fulfill its part of the contract, two relevant facts must be given:
#1. The policyholder or the insured must be up to date with the payment of the insurance premiums.
If the insurance is recently contracted and you have not paid the premium before the claim, the insurer is released from its payment obligation.
When it comes to the renewal premium, the insurance is suspended one month after its expiration and will only come into force again 24 hours on the day you pay the premium.
#2. The policyholder, the insured or the beneficiary must inform the insurer of the occurrence of the loss.
Notification of the claim must be done within a maximum period of seven from when you became aware of its occurrence unless a longer period has been set in the policy. If you are late and the deadline is passed, the insurer could claim the damages that this delay may have caused.
In addition to informing the insurer, the policyholder, or the insured, you must provide all the information on the causes and consequences of the loss. But it is that the law also transfers to the insured the obligation to prove the existence of the damages, the salvaged objects and the pre-existing ones at the time of the accident, as well as the valued estimate of the damages and losses.
Failure to comply with the duty of information may mean losing the right to compensation or the provision of the service.
How long do I have to claim insurance for a claim?
The usual thing is that we take time to declare the claim beyond the 7 days established by the norm, therefore you should know.
After these deadlines, the actions derived from the fact are considered to have been prescribed.
When the claim is related to a matter of civil liability and the claim is made against the insurer of the deceased, the period is one year to claim. After this time, the claim would be prescribed.
The insurance obligation for the payment of the benefit.
Once the insurer has knowledge of the loss, either by the declaration of the policyholder, the insured, beneficiary, or by any other means, the period established to resolve it begins.
However, each claim may have a different response time depending on the type of insurance contract affected by the claim.
Let’s see what the law establishes in each case.
In traffic accidents.
When we talk about the consequences of a traffic accident, we have to distinguish between damage caused to a third party, personal or material, and those caused to our vehicle.
As established in article 7 of RDL 8/2004, which approves the revised text of the Law on civil liability and insurance in the circulation of motor vehicles, the term begins at the moment that the injured party or his heirs claim the insurance company compensation for damages caused by your insured.
From this previous claim, the insurer has a period of three months to present a motivating offer of compensation if it understands that the responsibility has been proven and the damage is quantified. If the claim is rejected, you must give a reasoned response stating the reasons that prevent you from making an offer of compensation.
In this article, you will find all the information you need about the previous claim.
In all other insurance.
Before I told you that you had to distinguish the consequences in the traffic accident and I spoke to you about the damage caused to the vehicle. In this sense, as in any benefit derived from home, business, industry, accident, or life insurance, the insurer has a period of 40 days, from the moment it became aware of the accident, to pay the minimum amount of what it may owe according to known circumstances.
It goes without saying that if we do not inform the insurance company of the incident, we will hardly be able to claim payment within the previous period.
But there is more, in damage insurance, once the claim is declared, within five days the policyholder or the insured must notify the insurer in writing of the list of existing objects, those saved, and the estimate of the damage. But what is more, it is up to the insured to prove the pre-existence of the objects.
Based on this, you should adopt an active attitude, providing all the information to the insurer. About this, I recommend you read the content of this post. Do I have to wait for the insurance expert to come before I repair the damage from a claim?
When must the insurer pay default interest?
So far we have seen the terms that the insurer has to compensate and how it should do it. Failure to comply with this obligation is penalized as regulated in article 20 of the LCS.
The compensation incurred by the insurer for the delay will consist of the payment of an annual interest equal to the legal interest of the money in force at any given time, increased by 50%. After two years from the date of the claim, the interest may not be less than 20% per year.
This interest is considered to be produced by days and for its computation, the date of the claim will be taken as the start date and the time when the corresponding compensation is paid as the end. However, other dates may be given as determined by the judicial body that automatically files the default with the insurer.
The default of the insurer takes effect, in general, concerning the policyholder and the insured and, with a particular character, with respect to the injured party in the civil liability insurance and the beneficiary in the life insurance.