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Policyholders could be compensated for policy claim delays
Added 18/01/2012
Under new proposals from the Law Commission, individuals and businesses could be eligible for compensation if an insurance company unreasonably delays the payment of a valid claim or refuses to pay altogether.
Insurers would be required to pay valid claims within a reasonable timeframe, which would be flexible enough to allow the claim to be fully investigated and assessed.
According to David Hertzell, the Law Commissioner leading the project, these measures would bring insurance contract law in step with today's commercial realities.
As "small businesses, such as those struggling to get back on their feet after the recent riots, or after floods, are particularly vulnerable to late payment of insurance claims" the Law Commission is "seeking a solution that balances the insurers' need to investigate claims against policyholders' expectations that valid claims will be paid on time."
Interested parties have until 20th March 2012 to respond to the proposals.
