After a car accident, victims often expect that insurance will cover medical bills, car repairs, and other expenses in a timely manner. Unfortunately, many people find themselves waiting weeks or even months for a settlement. In some cases, insurance companies deliberately delay payouts, leaving victims under financial pressure while trying to recover.
These delays are not accidental. They are often part of a calculated strategy designed to protect the insurer’s bottom line. Understanding why insurance companies delay settlements after car crashes can help victims recognize unfair tactics and take steps to protect their rights.
The Business Model of Insurance Companies
At their core, insurance companies are for-profit businesses. Their revenue comes from collecting premiums, and their profits depend on paying out as little as possible in claims. The longer an insurer holds onto settlement money, the more it benefits financially.
By delaying claims, insurance companies may:
- Earn additional interest on money they hold.
- Pressure victims into accepting lower settlements out of desperation.
- Reduce the likelihood of paying full compensation if claimants give up or miss deadlines.
While insurers often frame delays as part of “due diligence,” the reality is that many tactics are designed to frustrate and wear down accident victims.
Common Reasons for Settlement Delays
Insurance companies use a variety of explanations to justify slow settlement processes. Some are legitimate, while others are deliberate stalling tactics.
1. Disputing Liability
One of the most common reasons for delay is a dispute over who was at fault. If the insurer believes its policyholder was not entirely responsible, it may drag out the process by requesting additional evidence or arguing comparative negligence.
2. Investigating Medical Treatment
Insurers often scrutinize medical records to challenge the extent of injuries. They may argue that treatment was unnecessary, that injuries were pre-existing, or that medical costs are inflated. This review process can take months and often requires additional documentation.
3. Requesting Excessive Documentation
Insurance companies may repeatedly request accident reports, medical bills, repair estimates, and wage statements. While some documentation is necessary, excessive or duplicate requests can be a deliberate tactic to slow progress.
4. Lowball Offers and Negotiations
Delaying a fair settlement allows insurers to test whether victims will accept lowball offers. Many accident victims, faced with mounting bills and lost income, may agree to less than they deserve simply to end the process quickly.
5. Claim Backlogs and Staffing Issues
Insurers may cite high claim volumes or staffing shortages as reasons for delay. While these factors may play a role, they also give insurers cover to prolong cases.
6. Legal and Procedural Tactics
Some insurers intentionally extend cases until the statute of limitations approaches, hoping claimants will miss filing deadlines. Others may delay in anticipation of a lawsuit, where they hope to negotiate a settlement for less than the claim’s full value.
How Delays Harm Accident Victims
Insurance delays can have devastating consequences for car accident victims.
- Financial strain: Medical bills, car repairs, and lost wages pile up while victims wait for payment.
- Emotional stress: Prolonged uncertainty adds to the trauma of recovering from an accident.
- Pressure to settle early: Many victims accept lower offers because they cannot afford to wait.
- Interrupted recovery: Without funds, victims may skip treatment or rehabilitation, worsening long-term health outcomes.
These harms often serve the insurer’s goal of reducing payouts, but they place a heavy burden on victims already struggling after a crash.
Recognizing Bad Faith Practices
Not every delay is intentional. Complex accidents, serious injuries, or unclear liability may legitimately require additional investigation. However, some delays cross the line into bad faith practices.
Signs of bad faith include:
- Repeated requests for documents already submitted.
- Failure to return phone calls or provide updates.
- Unreasonable denial of valid medical treatments.
- Sudden or unexplained changes in assigned claims adjusters.
- Settlement offers that are far below documented losses.
When these tactics occur, it may be necessary to escalate the claim with legal help.
Steps Victims Can Take to Address Delays
Victims do not have to accept endless waiting. There are steps that can help push a claim forward and hold insurers accountable.
1. Keep Detailed Records
Document every phone call, email, and letter with the insurance company. A paper trail can prove whether delays are excessive or intentional.
2. Respond Promptly
Submit requested documents quickly to avoid giving the insurer a legitimate reason for delay. Keep copies of everything for your records.
3. Follow Up Regularly
Consistent communication shows the insurer that you are monitoring the case and will not let it be ignored.
4. Involve Your Doctor
Ensure medical providers submit detailed reports that connect injuries directly to the accident. This reduces the insurer’s ability to dispute treatment.
5. Consult an Attorney
If delays persist, an attorney can intervene. (The attorneys at Cooney & Conway have helped many crash victims secure compensation.) Lawyers know how to identify bad faith tactics, negotiate aggressively, and file lawsuits if necessary. The threat of litigation often motivates insurers to act more quickly.
Legal Recourse for Bad Faith
If an insurer deliberately delays a settlement without justification, victims may have grounds for a bad faith insurance claim. These lawsuits argue that the insurer violated its duty to act in good faith and deal fairly with policyholders.
In successful cases, victims may recover compensation for the original claim, additional damages caused by the delay, and sometimes punitive damages to punish the insurer’s misconduct. Laws vary by state, so legal advice is essential when considering a bad faith action.
Insurance companies often delay settlements after car crashes, not because they must, but because it serves their financial interests. Whether by disputing liability, demanding excessive documentation, or dragging out negotiations, these tactics pressure victims into settling for less.
For accident victims, delays can create financial strain, emotional distress, and barriers to recovery. Recognizing when an insurer is stalling, keeping thorough records, and seeking legal help are critical steps to ensuring fair treatment.
At the end of the day, insurance is supposed to provide peace of mind and financial protection. When companies delay payment, they betray that trust. Holding them accountable is not only about securing compensation but also about making the system fairer for every accident victim.
