When you are making a long-term disability claim, your expectation is probably that the insurer will handle the claim in a timely manner. But insurers often fail to support claimants as promised. Insurers make money by keeping claim settlements low and monthly premiums high, so protecting their bottom line is top priority. Even if a settlement has been reached, an insurer may attempt to drag its feet when it comes time to paying out what was agreed upon.
Claim resolution regulations
There are state and federal regulations in place for how quickly an insurance company must acknowledge your claim in addition to rules for timely payment.
In California, private insurance companies are required to acknowledge the claim within 15 days. Once a claim has been acknowledged, it must be accepted or denied within 40 days. If a claim has been accepted, the insurer must make a payment within 30 days after a settlement has been reached.
For employer sponsored Employee Retirement Income Security Act (ERISA) disability claims, federal law says that you must receive a determination on your claim within 45 days. However, the administrator of your plan can grant itself a 30-day extension, but only if they do so before the initial 45-day period is over. This extension must also be necessary "due to matters beyond the control of the plan," and the plan must inform you 1) why they need the extension, 2) what additional information, if any, they need from you, and 3) when you can expect the plan to reach a decision.
If more information is requested, you will have at least 45 days to provide it. In addition, the plan administrator can grant itself a second 30-day extension so long as they comply with the law and do so before the first extension is complete.
It takes a team
Insurance claims are not dependent upon one person, so everyone involved needs to be actively working towards a resolution. While you cannot control every aspect of the claim, you can speed up the process by having as much information about your claim as possible when making the original submission. Once you have filed the claim, feel free to ask how long the process typically takes. Each case is different, but the adjuster should be able to give you an estimate of how long it will take.
Keeping communication open between yourself and the insurance company will also help. Respond immediately to phone calls and emails about the claim in order to keep the process moving. If possible, keep a communication log with dates and times communication occurred and copies of any relevant documents. Also be sure to confirm all conversations with the insurance company in writing. If your claim is taking longer than expected, the claims person handling your case should be able to explain what is causing any delays.
Waiting for an insurance company to respond to your claim can make you feel as if it is purposefully ignoring you. While hopefully that is not the case, insurers often play out the clock when handling a claim. If you are unhappy with the way your claim was handled, you can file a complaint with the California Department of Insurance, which regulates insurance companies. You are also free to contact an attorney at any time.