Why Do Insurance Companies Delay Settlements?

July 1, 2025

“My insurance company protects me.” Of course, most people believe this. Isn’t it the premise upon which insurance companies operate? If so, then why do insurance companies delay paying claims?

Individuals in Oklahoma and across the country have faith that the companies insuring their health, vehicles, businesses, and property have their best interests at heart. Unfortunately, this is not always the case.

The loyalty of insurance agents and representatives lies with the companies that employ them, not with their policyholders.

Their actions are guided by profit margins and corporate strategy. Insurance companies, regardless of the type of coverage, are for-profit businesses. Their priority is maximizing revenue, not delivering quick or fair settlements.

If you’ve filed a claim and are facing unreasonable delays or a denial, an experienced denied  insurance claims  lawyer can help. Contact one today to protect your rights and pursue the compensation you’re owed.

Why Do Insurance Companies Delay Paying Claims?

Every business exists to make money. Insurance companies are no exception. Their business model depends on collecting premiums and limiting payouts. That means that while their advertising promotes security and peace of mind, their internal operations are built to reduce claim expenses whenever possible.

Delaying claims is one of the most effective ways insurers boost their profit margins.

Insurance Claims Can Be Expensive

Whether for auto accidents, medical care, storm damage, or long-term care, insurance claims often come with substantial costs. Common claims include:

• Car accidents and property damage
• Disability and workplace injuries
• Homeowners’ insurance for storm or fire damage
• Health insurance and denied medical treatments.

Whether due to negligence or unavoidable events like severe weather, insurance claims can run into the tens or hundreds of thousands of dollars. A delayed payout leaves families financially strained and vulnerable, exactly when they need support the most. That said, the delay allows insurance companies to leverage interest on monies held. And, quite often policy holders become frustrated and don’t  pursue their delayed claims appropriately.

How Insurance Companies Delay Claims

You might assume that once a claim is filed, the company will promptly investigate and remit payment to their policyholders. Unfortunately, that’s rarely the case. Insurance companies have built-in tactics for slowing the process. These can include:

• Repeatedly requesting “additional documentation”
• Failing to return calls or emails
• Delaying inspections or investigations
• Disputing previously accepted evidence.

These delays frustrate policyholders — and that’s by design. The longer a claim drags on, the more likely it is that the insured will accept a lowball offer out of desperation.

The Business Benefit of the Delay

If paying claims quickly were profitable, insurance companies would do it. But delaying is beneficial.  Consider how.

Low Settlements Save Money

As frustration grows, claimants often agree to less than they are owed just to resolve the matter. Especially in injury cases where medical bills and lost wages pile up, quick resolution can feel urgent, even if the settlement is unfair.

This is why it’s so important to work with a lawyer. In Oklahoma, the statute of limitations for personal injury claims is two years. Insurers may try to run out the clock, knowing that time is on their side. A lawyer can help make sure your rights are protected before deadlines pass.

Delays Generate Investment Income

Insurance companies don’t leave premium payments sitting idle. They invest in them. According to recent NAIC data, the U.S. insurance industry held over $10.5 trillion in assets as of 2024. The longer insurers hold onto your claim money, the more interest they earn. This makes delaying claims a deliberate — and lucrative — strategy.

Knowledge is Power: Protect Yourself During the Claims Process

Be Informed Before You Buy

When choosing an insurer, don’t focus solely on price. Consider the company’s claims-handling reputation. Online reviews, Better Business Bureau ratings, and Oklahoma Insurance Department complaint data can all be helpful.

Additionally, ask friends or family members who have had to file claims, not just those who have been policyholders, for referrals.  It’s only through the claim process that the true character of an insurance company is revealed.

Keep Detailed Records

If you do file a claim, keep copies of all correspondence, medical bills, repair estimates, and any other documentation. If delays begin, this paper trail will be essential.

Can You Sue an Insurance Company for Delaying a Claim?

Yes — under Oklahoma law, insurance companies have a legal duty to handle claims in “good faith.” When they intentionally stall or act unfairly, it may be considered bad faith, and you could be entitled to compensation beyond the original claim amount.

Under Oklahoma’s Unfair Claims Settlement Practices Act, insurers are expected to:

• Acknowledge and act promptly upon communications
• Investigate claims thoroughly and fairly
• Not delay the investigation or payment without reasonable cause.

If these standards are violated, an experienced insurance lawyer can pursue damages on your behalf.

Damages in a successful bad faith lawsuit may include:

• Contract damages – what your insurance company originally owed you
• Compensatory damages – for emotional stress or financial hardship
• Punitive damages – to penalize the insurer and deter future misconduct.

Your bad faith insurance attorney can help identify, calculate and substantiate the totality of your damages.

Why You Need an Insurance Lawyer When Facing Delays

When you’re asking, “why do insurance companies delay paying claims?”, the answer is clear: it serves their financial interest. That’s why you need someone who understands both the law and the insurance industry.

Attorney Doug Terry has decades of experience dealing with bad faith insurance practices. He knows how insurers operate — and more importantly, how to challenge their tactics. Whether your case involves a property loss, medical claim, or disability denial, he can help you fight back.

Contact Doug Terry Law Today

If you believe your insurance company is unfairly delaying your claim, you don’t have to face the fight alone. Doug Terry Law focuses exclusively on insurance law and is deeply familiar with Oklahoma statutes, recent court decisions, and claims-handling requirements.

Don’t let an insurance company profit off your hardship. Let us help you address their actions and maximize your settlement. Contact us today at 405-463-6362 to schedule your free consultation.