Waiting months for an insurance payout after an accident can feel like adding insult to injury. Bills stack up, calls go unanswered, and you start to wonder if you can sue an insurance company for taking too long.
In states like Arizona, California and Colorado, insurers are legally required to handle claims fairly and promptly, but when they drag their feet without a good reason, you may have grounds for legal action. Here’s what you need to know before taking that next step.
Can You Sue an Insurance Company for Taking Too Long With Your Claim?
When you’re recovering from an accident, every delay adds stress. Arizona law requires insurers to adjust claims fairly and promptly, but some fail to meet those obligations. In certain situations, you can sue for unreasonable delay, but you’ll need to understand your policy and document everything.
Review Your Insurance Policy
Start by reviewing your insurance contract. Most policies include a “suit-against-us” clause limiting how long you have to sue. Many give you 12 months from the date of loss, though this varies by state.
- In Arizona, bad-faith lawsuits generally must be filed within two years
- In California, bad-faith suits usually follow the standard two-year statute for torts or four years for contract breaches
- In Colorado, claimants have two years from the date of the delay or denial to file suit
If you miss these deadlines, you could lose your right to sue—so track them carefully.
Your policy will also list the evidence you must provide, such as a proof of loss form. Insurers can legally delay your claim if you haven’t supplied required documentation. Follow all reporting procedures and get written confirmation when your documents are received.
Know What Counts as an Unreasonable Delay
Each state defines “unreasonable delay” a bit differently, but all prohibit insurers from ignoring or stalling valid claims.
- Arizona: Insurers must acknowledge a claim within 10 working days, complete investigations within 30 days, and accept or deny claims within 15 working days after receiving proof of loss. If they need more time, they must send updates every 45 days.
- California: Insurers must acknowledge a claim within 15 calendar days, decide within 40 days, and provide written updates every 30 days if the claim remains under review.
- Colorado:
Insurers are prohibited from unreasonably delaying or denying payment of benefits under C.R.S. §10-3-1115, and claimants can seek double damages plus attorney fees under §10-3-1116 if bad faith is proven.
Across all three states, bad faith generally means the insurer lacked a reasonable basis for delay and knew (or recklessly disregarded) that fact. Negligence isn’t enough; the delay must be unjustified.
Keep Meticulous Records
Strong documentation can make or break your case. Keep a claim journal noting every interaction, including dates, times, who you spoke with and what was discussed. Save all letters, emails, and forms. Take photos of damage and injuries, and keep copies of medical bills, prescriptions, and receipts.
These records help prove when the insurer received information and whether they met legal deadlines. If you risk missing a policy deadline, request an extension in writing at least a month in advance. Without written approval, assume the original deadlines still apply.
Why Do Insurance Companies Drag Out Claims?
