You are likely to hear this question, or a variation, at some point in your life: Why won't the insurance company pay my claim?
Turns out, the answer to that question can be as complex at times as answering the question, What's the meaning of life?
OK, maybe that isn't a fair comparison, but still. So let's talk about it.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
With an insurance policy, it starts out easy. You call an insurance agent or broker, or even visit them, or you talk with an insurance company directly and get the answers to your questions. Everything is peaches and cream.
Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.
Then you purchase the policy, and things are still pretty clean. You get a bill, you pay the bill. Rinse, repeat. This can go on for years. You're fulfilling, at least in part, your part of the insurance contract, the agreement between you and the insurance company.
You've done your part
You've already fulfilled other obligations for your part of the arrangement, such as filling out and signing an application, being honest with your answers and working with the company in good faith, the best you can. You've done it all.
Then something happens. That fateful day comes, and you have a loss. For simplicity's sake, let's use an auto accident as an example, since most of us, sadly, are familiar with car accidents.
Say you're involved in an accident — that luckily is not bad — and a few hours later, you file the claim with your insurance company on the phone or online.
Now they just cut the check, right? Just like you were writing checks, right? Well, not exactly.
What the insurance company has to do
While you've done your part in this scenario, which is actually pretty simple, what the insurance company has to do is infinitely more complicated.
First, they need to verify you have a policy with them. Then they need to check to see if the accident actually happened. (Yes, this is a thing.) Then they need to get the facts about the accident from all parties involved.
This means they want to talk to your passengers as well as the other driver and their passengers. There may also be the need to speak with eye witnesses to get a clearer picture of what actually transpired. Who was at fault for this accident?
We want to be sure that the accident is investigated as thoroughly as possible, since the other driver will rarely fall on their sword and say, "Yeah, sorry, mate. My bad."
What else they have to do
While this is happening, the insurance company also has to deal with the costs to repair the involved vehicles. That means they have to get eyes on them. Perhaps they'll ask you and the other driver to upload photos on an app, or maybe a claims adjuster or a body shop takes a look at the actual cars.
Looking for expert tips to grow and preserve your wealth? Sign up for Adviser Intel (formerly known as Building Wealth), our free, twice-weekly newsletter.
Guess what else? The other driver says he was injured and can't work, so he wants your insurance company to pay him for pain and suffering. That's going to mean, possibly, competing opinions from doctors.
There is more, but I think you get the idea. The insurance carrier has a boatload of stuff they need to deal with that we, as consumers, don't. That's literally what we pay them for. And they will do it.
Unfortunately, this stuff takes time — sometimes much longer than we would like it to. But we need them to do all of this — it is their job and their contractual obligation.
Do we wish they could write us a check as fast as we write them? Yes. Is it possible to be fast about it when they have a lot of details to weed through? Sadly, no.
Want to learn more about insurance? Visit KarlSusman.com.
Related Content
- 10 Mistakes People Make After They're in a Car Accident
- Why Has Your Car Insurance Gone Up? (And What You Can Do About It)
- Making Fraudulent Insurance Claims Can Land You in Jail
- What Is Insurance Good For? Let Us Count the Ways
- Five Reasons You Might Hate Your Insurance Company (and Why You Shouldn't)
-
Quiz: Do You Really Know How Social Security Benefits Are Taxed?Quiz Social Security benefits often come with confusing IRS tax rules that can trip up financially savvy retirees and near-retirees.
-
Are You Ready for 65? The Medicare Initial Enrollment Period QuizQuiz Turning 65 soon? Test your basic knowledge of Medicare's Initial Enrollment Period (IEP) rules in our quick quiz.
-
3 Ways to Stretch the 2026 Social Security COLA For Your BudgetThree steps retirees can take to stretch the Social Security COLA to fit their budgets.
-
Giving Tuesday Is Just the Start: An Expert Guide to Keeping Your Charitable Giving Momentum Going All YearInstead of treating charity like a year-end rush for tax breaks, consider using smart tools like DAFs and recurring grants for maximum impact all the year.
-
Uber Takes Aim at the Bottom Lines of Billboard Personal Injury LawyersUber has filed lawsuits and proposed a ballot initiative, in California, to curb settlements it claims are falsely inflated by some personal injury lawyers.
-
Dow Slides 427 Points to Open December: Stock Market TodayThe final month of 2025 begins on a negative note after stocks ended November with a startling rally.
-
11 Cities With the Cheapest Groceries in the USIf you live in one of these 11 cities, you're paying less than the rest of the country to keep your fridge stocked.
-
A Financial Adviser's Health Journey Shows How the 'Pink Tax' Costs WomenFact: Women pay significantly more for health care over their lifetimes. But there are some things we can do to protect our health and our financial security.
-
I'm a Cross-Border Financial Adviser: 5 Things I Wish Americans Knew About Taxes Before Moving to PortugalMoving to Portugal might not be the clean financial break you expect due to U.S. tax obligations, foreign investment risks, lower investment yields and more.
-
Giving Tuesday 2025: 'Every Small Act Makes a Major Difference'GivingTuesday encourages generosity in any form, from donating to charity to helping your neighbors.
-
What to Make of a Hot IPO MarketThis year's crop of initial public offerings could be even dicier than usual because of a skew toward tech and crypto.
