My insurer is not paying, or is dragging its feet

The silence after the report

You report the claim, the adjuster visits, and then nothing happens. Weeks of calls and “it is being processed”. It feels as though the company sets the deadline.

It does not: there is a deadline written into the law, and missing it has a specific financial consequence.

What the law says

The insurer must pay the indemnity once the necessary investigations and valuations are complete. But in any event it must pay, within forty days of receiving the claim declaration, the minimum amount it may owe based on what it already knows. This is not a voluntary advance: it is an obligation.

It is deemed to be in default where it has not performed within three months of the loss occurring, or where it has not paid that minimum amount within forty days.

The consequence is interest that the court imposes of its own motion: an annual rate equal to the statutory interest rate increased by 50 %, accruing daily and without any need for a court claim. And once two years have passed since the loss, that rate cannot be lower than 20 % a year.

The clock starts on the date of the loss. But if it was not reported within the policy period or, failing that, within seven days, it starts on the date of the report — another reason to report early.

One exception worth knowing so as not to be caught out: no default interest is due where the failure to pay is based on a justified cause or one not attributable to the insurer.

An example

A home claim is declared on 1 March. The company has until 10 April — forty days — to pay the minimum amount it might reasonably owe on the information it already has, even if the loss assessment is still open.

If by 1 June, three months after the loss, it has not performed, it is deemed to be in default and interest runs from 1 March, not from June.

If the matter dragged on beyond two years, the annual rate could not fall below 20 %.

What to do with this

First, have the dates: when the loss happened and when the declaration was submitted. Those two govern every deadline above.

Second, tell apart a file that is moving slowly from one that is stopped for no reason. The law protects the latter; for the former, pushing the process with whoever handles it is usually what works.