Insurance Companies Have to Pay Agreed-to Settlements Quickly
Usually, we complain that an insurance company is slow to resolve a claim, slow to investigate claims, or slow to actually tender an amount of money under the policy that is necessary and sufficient to fulfill the obligations under the insurance contract. But sometimes, they act quickly, and the homeowner and the insurance company do come to an agreeable settlement.
Once that’s done, there’s only one more step—actually getting the check from the insurance company.
Tendering Timely Payment
There is a law that requires that, once a settlement is entered into by the parties, that the insurance company tender the check in a timely and reasonably quick manner. An insurance company must tender the agreed-to amount within twenty days.
An insurance company can condition payment upon the signing of a settlement agreement or release, so the twenty days actually starts when the release is signed, if one is required, as it almost always is.
If the insurance company doesn’t pay in a timely manner, the homeowner can get the settlement amount, as well as interest and any attorneys fees that were incurred by having to enforce the settlement agreement.
Strict Compliance With the Settlement Agreement
If the settlement agreement has terms and conditions, those terms and conditions must be met by the insurance company, otherwise, it will not be considered to have made a timely payment.
For example, assume that a settlement agreement is reached that requires that the insurance company to mail the check to the attorney’s office. If a check is supposed to be made out to the homeowner, or to the homeowner’s attorney, or to both, it must be made out however specified or required in the release or settlement agreement.
Even an innocent mistake, like a scrivener’s error (an innocent, clerical mistake, such as issuing a check with a misspelled name, or to an incorrect address), will not comply with a release, if the release sets forth who the check should be made out to. In that case, the homeowner could file a motion to enforce the settlement, and get the statutory interest.
This may seem harsh for the insurance companies. But it avoids a situation where an insurance company agrees to an amount to settle, just to get a trial off the court’s trial docket, and then doesn’t pay. In that case, the homeowner would be stuck having to wait for another available trial date.
Additionally, money that the insurance company holds—that is, doesn’t pay according to the parties’ agreement—is really money that belongs to the homeowner. An insurance company should not be able to collect whatever interest that money is accruing, when the money rightfully belongs to the homeowner once the release is signed.
The requirement to tender payment in a timely manner by an insurance company when there is a settlement between the parties, applies to all kinds of insurance—not just homeowner insurance.
Don’t let an insurance company delay evaluation or payment of your insurance claim. Contact the Miami property damage insurance attorneys at Velasquez & Associates P.A. today for help.