June 15, 2012
TIMELINESS OF CLAIM PAYMENTS UNDER HOMEOWNERS INSURANCE POLICY
By: Janet L. Kaminski Leduc, Senior Legislative Attorney
You asked if state law requires insurers to resolve homeowners' insurance claims within a specified number of days.
The unfair claim settlement practices law requires insurers to settle claims with reasonable promptness (CGS § 38a-816(6)).
Under standard fire policies, which cover only fire and lightening losses, insurers must resolve a claim within 30 days after they receive proof of loss and the loss is ascertained. The insurer and the insured may agree in writing to a partial advance payment, but this does not affect the requirement for the insurer to pay the total amount of loss within 30 days after proof of loss (CGS § 38a-307).
A homeowners' insurance policy offers coverage that is broader than the standard fire policy. Current law does not establish a specific claim payment timeframe for homeowners' insurance policies. But effective July 1, 2012, PA 12-162 sets the same 30-day timeframe for homeowners' insurance policies issued or renewed on or after that date as applies to standard fire policies.
The Insurance Department tracks complaints it receives relating to timeliness of claim payments to determine if there is a violation of law.