I was recently asked by a collegue how long an insurance carrier has to pay a claim once it has been submitted. Because I maintain a database of regulations for the fifty states at my desk, I could answer the question quickly, but I realized that having a quick reference for these materials might be helpful for others, and with that a blog series was born. I hope to work through all fifty states to discuss the regulations (or lack thereof) that affect claims handling. Naturally, the first stop is the Garden State.
New Jersey’s administrative code provides a rigid framework within which the insurance companies must operate. The carrier must acknowledge the claim, advise of the contact information for the adjuster and provide all necessary claim forms within 10 days of reciept of the claim.1 They must reply to all “pertinent” communications within 10 days.2 They must commence an investigation into the claim within 10 days.3 Importantly, in first party claims, the insurance carrier must complete its investigation and make payment within 30 days of a properly excuted proof of loss.4 If they cannot meet that deadline, they must send written notice to the insured why additional time is needed.5 They also must pay all settled claims within 10 working days from when they receive the signed agreement.6 Finally, the carrier must advise all claimants with whom they are negotating if a statute of limitation may affect their rights at least 60 days before the deadline would expire.7
In theory, it seems like New Jersey would be a pretty good place to be an insured with a claim. In practice, these deadlines and requirments are not often met. The reason is there are no teeth in the regulations and there is no private right of action for a violation. Despite that fact, claimants and their representatives must be aware of the requirments and push for their insurer to follow them, such insistance could be helpful if litigation later proves necessary.
As former Governer Tom Kean used to say. “New Jersey and You, Perfect Together.” As you can see from the photograph above, I was fortunate enough to meet the former governer recently.
1 N.J. Admin. Code §11:2-17.6(b & c).
2 N.J. Admin. Code §11:2-17.6(e).
3 N.J. Admin. Code §11:2-17.7(a).
4 N.J. Admin. Code §11:2-17.7(c)(1).
5 N.J. Admin. Code §11:2-17.7(e).
6 N.J. Admin. Code §11:2-17.7(f).
7 N.J. Admin. Code §11:2-17.8(e).