Delay in Insurance Payout

F

frankfred

Registered User
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I've been told that insurance companies have 10 days to settle claims or else their liable for steep interest penalties. Is this true, and how are the fines calculated?

A family will is going un-administered for three years while waiting for the insurance companies requirements to be satisfied. It now looks like it was a mistake on their part, and they had everything required to settle the claim for the last two years. They are going to pay out on the claim now.

Does the family have any recourse to an increased payout?

Cheers,
F
 
Hi Pete,
Death was a result of a traffic accident which was covered by income protection policy. A PM was conducted and death certificate prepared. The insurance company had the cert for two years & are now settling the claim on basis of the same cert. No new evidence to support the claim was provided in the interim. Basically, they just stalled for two years. I thought that there was a penalty for such behaviour, and if so, what?
Thanks,
F
 
I do not know the factual answer where the parties are dealing with the issue by negotiation / correspondence.

If the estate had sued the insurers for breach of contract I would expect that would include a claim for interest.

The basic principle here is that interest should be claimed and paid because the claimants have been "wrongly kept out of their money" by the erroneous conduct of the insurers.

The insurance company have to be given a reasonable opportunity to make investigations. However, on the information provided, it seems that there is no justification for the inordinate delay. Once the insurers became possessed of all the relevant evidence that would enable them to admit the claim payment should have been forthcoming. The insurers have had the use of the money in the period of delay.

I would make a formal demand of the insurers for the payment of interest due to the unjustified and unreasonable delay on their part. I would demand payment of interest at whatever the current rate is that is awarded on court judgments.

You could also threaten to proceed against them including a complaint to the Financial Services Ombudsman.

P.S. You could try e-mailing the High Court to ask them to verify the current rate of interest that the courts use at HighCourtCentralOffice@courts.ie You can check this when you get an offer from the insurers to see that what they offer is correct at that time.
 
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I would advice this particular case as an excellent one for 'Talk to Joe'. I'll buy you a pint if that doesn't sort it. Joe loves these types of stories.
 
P.S. I suspect that the relevant interest rate is somewhere around 8%. I am not sure if it is at a simple or compound rate.
 
An additional thought prompted by something I was doing today.

IF the insurers send you a cheque for the amount due - excluding any element of interest - be careful about negotiating it.

Some insurance company cheques will be accompanied by a covering letter indicating that acceptance of the cheque is a full and final discharge of all liability. Sometimes the cheque may incorporate a preformatted wording to that effect. The object of this exercise is to get you to accept that there is nothing further due.

You can send the insurers a letter (or e-mail for preference) indicating that you are accepting the cheque strictly without prejudice to the issue of interest on the amount that should have been paid before now. Additionally, you should put a similarly worded endorsement on the back of the cheque before lodging it. Copy the front and back of the cheque for your records before lodging it.
 
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