How Long Does Insurance Claim Take To Settle?

insurance claim
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After a disaster, you want to get back to normal as soon as possible, and your insurance company wants that too. This means you both want your insurance claim settled as soon as possible.

You may get multiple checks from your insurer as you make temporary repairs, permanent repairs, and replace damaged belongings. Here’s what you need to know about claims payments.

What is a claim in insurance?

An insurance claim is a formal request made by a policyholder to an insurance company for coverage or compensation for a covered loss or policy event. When a policyholder experiences a loss or an event covered by their insurance policy, they submit a claim to the insurance company to seek reimbursement or payment for the damages or expenses incurred.

How does the insurance claim process work?

The insurance claim process involves the following steps:


When a loss or event occurs, the policyholder needs to notify the insurance company as soon as possible. This can be done through a phone call or an online claims portal. Prompt notification allows the insurance company to initiate the claims process promptly.

First Notice of Loss (FNOL)

The initial notification triggers the creation of a First Notice of Loss (FNOL) report. The policyholder provides details about the incident, including the date, time, location, and a description of what happened. The insurance company may assign a claims adjuster to the case at this stage.


The policyholder is required to gather and submit relevant documentation to support the claim. This may include photographs or videos of the damage, police reports, medical records, invoices, receipts, or any other evidence related to the loss.

The more thorough and detailed the documentation, the smoother the claims process will be.


The insurance company will investigate to verify the details of the claim. This may involve gathering additional information, interviewing witnesses, or consulting with experts. The purpose of the investigation is to determine the validity of the claim and assess the extent of the loss.

Coverage Assessment

The insurance company reviews the policy to determine the specific coverage that applies to the claim. They assess whether the policy covers the loss or event and to what extent. This assessment helps determine the amount of compensation the policyholder is eligible to receive.


Once the investigation and coverage assessment is complete, the claims adjuster calculates the value of the claim based on the policy terms and conditions. They consider factors such as deductibles, depreciation, or any applicable limits. The adjuster may also consult with specialists or use industry-standard tools to determine the value of the loss.

Claim Settlement

If the claim is approved, the insurance company will offer a settlement amount to the policyholder. This amount may be paid directly to the policyholder or a third party, such as a repair shop or medical provider. The settlement may cover the cost of repairs, replacement of damaged items, or reimbursement for expenses incurred due to the loss.

Claim settlement in insurance

Settlement of a claim in insurance is the process of resolving and finalizing an insurance claim by providing compensation or benefits to the policyholder or the insured party. It involves determining the extent of liability, evaluating the claim, and reaching an agreement on the amount to be paid or the services to be provided.

It involves the following steps:

Filing the claim

The insured party must notify the insurance company about the loss or damage covered by the policy and submit the necessary documentation to support the claim.

Claim investigation and evaluation

The insurance company will investigate to assess the validity of the claim. This may involve gathering evidence, interviewing witnesses, and evaluating the extent of the loss or damage.

Based on the investigation, the insurance company will evaluate the claim and determine the coverage and amount payable under the policy. This evaluation may consider factors such as policy terms, deductibles, exclusions, and policy limits.

Negotiation and settlement offer

If there is a disagreement between the insured party and the insurance company regarding the settlement amount, negotiation may take place to reach a mutually acceptable resolution. The insured party may provide additional supporting documentation to support their claim.

Once the evaluation and negotiation process is complete, the insurance company will make a settlement offer to the insured party. The settlement offer may include a payment of funds or the provision of services. This depends on the nature of the claim and the policy coverage.

Acceptance or Rejection

The insured party has the right to accept or reject the settlement offer. If the offer is accepted, the insurance company will proceed with the payment or service provision as agreed upon. If the offer is rejected, further negotiation or dispute resolution methods may be pursued.

Claim Payment

If the settlement offer is accepted, the insurance company will make the payment to the insured party according to the agreed terms. The payment may be made in a lump sum or installments, depending on the circumstances and the policy provisions.

How long does an insurance claim take?

States often limit the amount of time insurance companies can take to decide on and pay out a claim. States have different guidelines. However, insurance companies must often decide whether or not to accept a claim in about 30 days and pay it out shortly after that.

But while states have rules about the time claims can take, things can get more complicated (and take longer) when insurance companies need extra time to investigate a claim. 

Claims might take longer if they involve:

  • An accident where fault isn’t clear
  • Multiple drivers and vehicles
  • Serious injuries or long hospital stays
  • Significant property damage
  • A company with a smaller claims-handling department
  • Disputes about settlement amounts

For example, a claim you make when your car battery dies and you have to call a tow or if your window was smashed during a car break-in is pretty straightforward. That type of claim moves more quickly than one involving multiple drivers, serious injuries, and a lot of back-and-forth between parties.

How long do insurance claims take to pay out?

States also have rules that limit how long insurance companies can take to send you a payment after approving a claim. Generally, insurance claim payouts take less time than the claim itself.

After a settlement is reached, insurance companies usually have to send you the payout in as little as a few days. Some states require companies to pay out a claim “immediately” or “promptly” after a decision, or no more than 30 days afterward.

Do insurance companies have claim time limits?

Yes, many states have rules that set time limits for how quickly car insurance companies must rule on and then pay out claims. 

Rules vary by state but in some states, insurance companies have between 15 and 40 days to decide whether to accept or deny a claim. They then have between 5 and 30 days to pay out a claim after a decision.

StateClaim decisionPay out
California40 days30 days
Texas15 days5 days
Florida“Reasonable time”20 days
New York30 days5 days
Pennsylvania15 days“Promptly”

However, states also give providers a few weeks of leeway in case they need more time on a claim. But if this happens, states often require an insurance company to let you know and explain the hold-up.

If your claim does end up being delayed, it could be because of the severity of the accident that led to the claim. It could also be the need for more investigation, high claim volume at the insurance company, or other factors that are slowing down the process.

Why do some claims take longer?

The more serious the accident or incident that led up to the claim, the longer the claim (and the payout) will take. Companies can process some claims more quickly than others when there are fewer details and people involved in the claim.

Here are a few of the biggest reasons:

  • Severity of the injuries. If a driver is badly injured in a car accident, expect the settlement to take longer. The driver has to finish treatment in order to determine how much money they can get.
  • Dispute over which driver was responsible. After an accident, it’s not always immediately clear who was responsible. If there is a dispute about each driver’s negligence, it’s going to take the insurance companies longer to settle the claim.
  • Back-and-forth negotiations. In general, settlement negotiations can take a lot of time. There’s usually a good amount of back-and-forth between lawyers, victims, and the car insurance companies.

However, there are laws against undue claims delays. An insurance company needs to provide a payout within a certain number of days from the time the claim is settled and everything is finalized.

It’s also important to mention that some insurance companies are just slower to pay out claims than others. For example, if you work with a small insurance carrier that only has one adjuster, it could take much longer to receive your payout. Large insurance companies have teams of adjusters who work to resolve claims all day long.

Your participation can also affect how quickly you’ll get paid for a car insurance claim. If your claims adjuster asks you for documents and you take days to get it to them, it will slow the process down.

How to prevent delays when filing an insurance claim

Dealing with a delayed claim can be incredibly frustrating. Below are some ways that you can prevent a delay when filing a claim:

  • Gather as much information as possible. After the accident, take lots of photos of the damage, write down when and where the accident took place, and a description of what happened. That way, the insurance company won’t have to track down this information in the future.
  • Research the laws in your state. As mentioned, some states require insurance companies to settle claims within a certain period. Know the laws in your state, and if the insurance company is taking too long, let them know or hire a lawyer to back you up. 
  • Be proactive. The truth is that settling claims can take time. If you feel like your insurer is dragging their feet, don’t be afraid to reach out proactively and get an update. Don’t wait for them to contact you.

If you find yourself waiting months for a claim to get resolved, there are a few things you can do to speed up the process. Here are some suggestions:

  • Keep a log of every conversation you have with the insurer, including the date and next steps.
  • Respond to requests and complete paperwork as soon as possible to keep things moving forward.
  • Digitize copies of accident reports and damage evidence in case you need to share them quickly.
  • Never lie to your insurance company. The truth will eventually come to light, and it will slow down the process significantly

Ultimately, one of the best ways to avoid claim delays is to work with a reliable insurance company.

What to do if your insurance claim is taking a long time

If your insurance company is taking a long time to process a claim, you can take matters into your own hands. Reach out to the adjuster who is overseeing your claim and ask for an update on where they are in the process — and what you can do to expedite things.

If your state specifies a time limit in which insurers must resolve claims, make a note of the deadline. If the date passes, notify your insurance company right away. Depending on your state’s laws, you might have grounds for a lawsuit if the claim doesn’t get resolved promptly.


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