Insurance policies are highly regulated contracts. When you make an insurance claim, the insurance company is required to follow certain laws for the process. Insureds (policyholders) need to understand how your insurer should handle your claim and what rights you have so that you can recover what you are owed for your claim after a loss. Knowing your legal rights will make it easier for you to keep your claim on track toward a fair and full claim settlement without unreasonable delays.
Wisconsin insurance companies are required to be fair and reasonable and follow state laws and regulations. They must do a timely, thorough, and unbiased (neutral) investigation and assessment of your claim. They must work with you to adjust your claim and pay what they owe in a timely and fair manner and in full compliance with the policy contract and applicable laws.
The information included here will give you a basic understanding of how the claim process should go and the legal rights that give you leverage to get a fair outcome.
What Laws Govern Insurance Policies?
Wisconsin has passed numerous laws that insurance companies are required to follow. In addition, there are administrative codes, which are rules and regulations that Wisconsin regulators have created that create additional rules that insurance companies must follow. In addition, to the express laws and rules, the Wisconsin Office of the Commissioner of Insurance (OCI) will issue notices or bulletins to insurance companies that offer guidance as to how the OCI wants to see claims adjusted.
Here are the places where your rights and obligations as a Wisconsin insurance consumer are spelled out:
Wisconsin Insurance Statutes
Administration – Chapter 601
Wisconsin Statute Chapter 628 Insurance Marketing
Timely Payment of Claims – 628.46
Indemnity Amounts – Policy Value – 632.05
Limitation of actions – 631.83 (note: It is important to check your policy because some insurance policies have a longer period than the statutory 1-year minimum)
Wisconsin Administrative Code
Chapter 6 – General
Insurance Claim Settlement Practices – 6.11
Prohibited Business Practices – 6.60
Notices and bulletins issued by the Wisconsin Office of the Commissioner of Insurance
Time Frames and Deadlines
The above-listed laws and regulations contain specific deadlines and rules which insurance companies are required to follow. The important deadlines are below:
How Long Does Your Insurance Company Have to Acknowledge Your Claim?
“Promptly”/ 10 Days –Your insurer must acknowledge your claim within 10 days after receipt of a communication concerning a claim. This information should be included in the insurer’s claim file.
The Wisconsin Administrative Code also requires insurance companies to act “promptly” and provide necessary claim forms, instructions, and reasonable assistance so that first-party claimants can comply with the policy conditions and the insurer’s reasonable requirements. See Wis. Admin. Code Ins. § 6.11(3)(a)(3).See Wis. Admin. Code Ins. § 6.11(3)(a)(1). “Promptly” is defined as 10 consecutive days. See Wis. Admin. Code Ins. § 6.11(4).
How Long Does Your Insurance Company Have Respond to Your Communications?
Promptly/10 Consecutive Days – Your insurer is required to promptly acknowledge pertinent communications from you that reasonably indicate a response is expected. “Promptly” is defined as 10 consecutive days after receipt. See Wis. Admin. Code Ins. § 6.11(4).
How Long Does an Insurance Company Have to Investigate Your Claim?
“All reasonable dispatch” – The administrative code requires your insurer to initiate and conclude the investigation of your claim with all reasonable dispatch. See Wis. Admin. Code Ins. § 6.11(3)(a)(2). The problem is that “reasonable dispatch” is not defined. Although the Wisconsin administrative code does not “reasonable dispatch,” the Wisconsin statutes have a requirement that insurance companies pay claims within 30 days unless an insurance company has reasonable proof that it is not responsible for providing coverage. Wis. Stat. § 628.46.
Reasonable time – An insurer must let you know if your claim is being accepted or denied within a reasonable time after proof of loss has been completed. See Wis. Admin. Code Ins. § 6.11(3)(a)(7)
What Is the Statute of Limitations For Insurance Claims?
The default statute of limitations is just one year after the date the loss occurred. This limitation is typically also stated in your policy’s “suit against us” provision, or similarly worded provision. However, some policies may extend the period stated in your policy to two years. It is crucial to check with an experienced Wisconsin insurance claim attorney to avoid losing your legal rights.
What Are Unfair Claim Practices?
Your insurer is prohibited from using unfair claim practices and/or treating you unfairly during the claim process. The Wisconsin OCI has listed conduct that insurance companies are prohibited from in engaging during the claims process. The following are a few examples listed in Wis. Admin. Code Ins. § 6.11(3) Specific Unfair claim settlement practices defined:
Any of the following acts, if committed by any person without just cause and performed with such frequency as to indicate general business practice, shall constitute unfair methods and practices in the business of insurance.
1. Failure to promptly acknowledge pertinent communications with respect to claims arising under insurance policies.
2. Failure to initiate and conclude a claims investigation with all reasonable dispatch.
3. Failure to promptly provide necessary claims forms, instructions and reasonable assistance to insureds and claimants under its insurance policies.
4. Failure to attempt in good faith to effectuate fair and equitable settlement of claims submitted in which liability has become reasonably clear.
5. Failure upon request of a claimant, to promptly provide a reasonable explanation of the basis in the policy contract or applicable law for denial of a claim or for the offer of a compromise settlement.
6. Knowingly misrepresenting to claimants pertinent facts or policy provisions relating to coverages involved.
7. Failure to affirm or deny coverage of claims within a reasonable time after proof of loss has been completed.
8. Failure to settle a claim under one portion of the policy coverage in order to influence a settlement under another portion of the policy coverage.
9. Except as may be otherwise provided in the policy contract, the failure to offer settlement under applicable first party coverage on the basis that responsibility for payment should be assumed by other persons or insurers.
10. Compelling insureds and claimants to institute suits to recover amounts due under its policies by offering substantially less than the amounts ultimately recovered in suits brought by them.
11. Refusing payment of claims solely on the basis of the insured’s request to do so without making an independent evaluation of the insured’s liability based upon all available information.
12. Failure, where appropriate, to make use of arbitration procedures authorized or permitted under any insurance policy.
13. Adopting or making known to insureds or claimants a policy of appealing from arbitration awards in favor of insureds or claimants for the purpose of compelling them to accept settlements or compromises less than the amount awarded in arbitration.
What Can You Do If the Insurance Company Engages in Unfair Claims Practices?
Insureds have several things that they can do when their insurance company is acting inappropriately or engaging in unfair claims practices.
How Can You file an official complaint with the Wisconsin Office of the Commissioner of Insurance?
The Wisconsin Office of the Commissioner of Insurance oversees how insurance companies operate in the state. They can impose penalties on your insurance company if the insurance company does not comply with the laws in your state that require insurers to handle claims fairly and in good faith.
You can call the Wisconsin Office of the Commissioner of Insurance hotline with any questions or complaints toll-free at:
E-mail insurance questions to:
You can file a complaint online by going to https://oci.wi.gov/Pages/Consumers/Filing-a-Complaint.aspx and filling out the “File an Insurance Complaint” for an online form.
Unfortunately, in our experience, the OCI’s ability to help specific policyholders has been limited. After an insured makes an OCI complaint, the Insurance Company will often have its lawyers respond to the complaint and argue that they are acting appropriately in adjusting the claim because they are still investigating or are waiting on information from the policyholder. Keep in mind that filing a complaint with the OCI will not stop your statute of limitations from running.
Hiring Professional Help
If your insurance company is delaying payment of your claim or is contesting coverage, you should consider hiring professional help such as an attorney to navigate your claim. Experienced Wisconsin insurance dispute lawyers can help guide you through the claims process and ensure that your insurance is honoring the bargain it made when it sold you the policy.
Murdock Law, S.C. helps people and businesses with their insurance claims. Contact the attorneys at Murdock Law if you feel like you’ve been treated unfairly by your insurance company, or you’re just not sure where to start. We’ll double-check your insurance policy and work with you to make sure you’re getting what you deserve on your claim.