- Most personal injury settlements are paid within two to four weeks after agreement.
- Complex settlements requiring special conditions or court approval can take months.
- You can take legal action to enforce a settlement with an insurance company.
One of the most frustrating things you can experience is waiting for the insurance company to send the settlement check after you have agreed to accept a settlement offer. If you are reading this article, you probably want to know how long an insurance company has to send the settlement check and what you or your lawyer can do, or should do, if the adjuster is dragging his or her feet.
Like most things in life, the short answer is “it depends.” Here are some common timelines and reasons that insurance settlement checks get delayed, and some of your legal options.
“Simple” insurance settlements often take two to four weeks from agreement to payment.
Even in a relatively straight-forward personal injury case, once you say “yes” to a settlement offer, it is normal for it to take two to four weeks from the time you or your attorney agree to accept the offer to the time that you are able to deposit or cash a settlement check. This is because once the offer is accepted, the insurance adjuster has paperwork to process, the parties must agree on the language that goes into a settlement release, the insurance company must process and issue the payment check, and your lawyer’s office must receive the funds and pay any outstanding medical bills and costs and deduct attorneys fees before writing a check that you can cash or put into your bank account.
Even if the insurance adjusters, defense lawyers or your attorney work on the settlement without delay, each step in the process can take a few days.
“Complex” insurance settlements can take weeks or months to be paid.
Some personal injury cases require intense negotiation of the language that goes into a settlement release. Often this negotiation does not take place until there has been an agreement on the amount to be paid. In other cases, such as an injury to a minor or an incapacitated adult, the parties are not able to pay the injured person until a Court approves the settlement amount and the distribution of any bills, costs, and attorneys fees from the total settlement. The process of applying for court-approval of a minor’s settlement or incapacitated adult’s settlement can take several weeks up to several months, depending on how quickly the petition can be filed and when the Court schedules any necessary hearings.
Common reasons insurance settlement checks get delayed:
- An insurance adjuster goes on leave due to a scheduled vacation, medical or family emergency after agreeing to settle and send your money.
- You or your attorney are not satisfied with the terms the insurance company or defendant includes in the settlement release, and more negotiation is required.
- The insurance company attempts to slip new conditions into the settlement that were not agreed upon when the monetary offer was accepted.
- The bank places a hold on the settlement check for an unexpected reason.
These, and any number of other unexpected events can sometimes cause a delay between the time you agreed to accept the settlement offer and the time you can finally deposit or spend your settlement money.
What can I, or my lawyer, do when there is a delay in payment from an insurance company?
There are many different things you or an attorney can do to “force” an insurance company to pay an agreed-upon settlement. Unfortunately, most of them are not going to result in you receiving funds overnight:
- Yes, this does not sound very exciting. But, compared to your other options, this is the first place to start. You or your attorney may call a supervisor with the insurance company or a senior attorney and complain about the delay. It is surprising how often this can help.
- File A Motion to Enforce Settlement or Sue for Breach of Contract. If the insurance company is delaying without a good explanation, attempts to change the terms of an agreed-upon settlement, or has tried to back-out of the settlement, they can be taken to Court. Not only can you ask the Court to enforce the settlement agreement, you can seek attorneys’ fees, costs and interest. Unfortunately, this takes a lot of time and legal work. It can take additional weeks or months to seek enforcement of a settlement in Court.
- File a Lawsuit and go to Trial. In certain cases, an insurance company’s failure to pay a policy limit after a time-limited demand has been sent can result in the insurance company being accountable or exposed to pay you far more than you initially offered to settle the case for. Should this happen, you need an attorney who is an expert in insurance bad-faith.
How to protect yourself from delays in payment from an insurance company.
One thing that you can do to keep the pressure to pay quickly on an insurance company is to write a time-limited demand, requiring the insurance company to agree to pay and deliver funds on or before certain deadlines. Keep in mind that such demands have special rules attached to them and only have “teeth,” under certain circumstances.
Another common technique used is to negotiate a deadline by which the settlement funds must be received by you or your attorney. Then, in the event the insurance company has not paid (through no fault of yours) on or before that deadline, the settlement is null and void. Alternately, the insurer could be required to pay a penalty or insurance for delay in making payment to you.
Other things you can do are to work-out in advance of settlement the amounts that you will need to reimburse to any doctors, health insurers or government agencies (Medicaid or Medicare – although this is no longer always possible), from your settlement, which will speed up the ultimate distribution of the settlement funds when they are received and deposited into your attorneys trust account.
If you have run into a problem getting an insurance company to pay a fair settlement, or to send your settlement check, feel free to contact our office. We are experts in personal injury settlement law.