Question 1

Do insurance companies owe interest on late claim payments?

Accepted Answer

Yes, in many states — by statute. Texas Ins. Code §542.060 makes an insurer that misses the prompt-payment deadlines liable for 18% a year on the claim as damages, plus attorney's fees. Florida property insurers owe interest from the date they received notice of the claim (§627.70131(7)(a)). New York no-fault benefits accrue 2% per month once overdue. Arizona, Georgia (health) and California (health) have their own rates of 10-15%.

Question 2

Do I have to ask the insurer for this interest?

Accepted Answer

In several states, no — it is automatic. Florida: "Interest is payable when the claim or portion of the claim is paid" with no request needed. California Ins. Code §10123.13 requires insurers to "automatically include" the accrued interest and adds a penalty (the greater of $15 or 10% of the interest) when they don't. In practice insurers often pay only when a citation-locked demand arrives.

Question 3

Why is my hail damage claim different in Texas?

Accepted Answer

Because ch. 542A (2017) applies to weather/forces-of-nature property claims: the damages rate drops from 18% to prime+5 (currently 11.75%), and §542A.003 requires a pre-suit notice at least 61 days before filing, stating the acts or omissions, the specific amount owed, and attorney's fees. Quoting 18% on a hail claim is legally wrong.

Question 4

Does this apply to my employer health plan?

Accepted Answer

Only if the plan is FULLY-INSURED. Self-funded employer plans are beyond state prompt-pay law entirely under ERISA's deemer clause (29 U.S.C. §1144(b)(2)(B)) — check your Summary Plan Description. Government and church plans follow their own rules.

Insurers owe interest on late-paid claims. Almost nobody collects it.

Why nobody collects

The honest map