DELAYED INSURANCE PAYMENT DEMAND LETTER

SENDER INFORMATION

[YOUR NAME / LAW FIRM NAME]
[ADDRESS]
[CITY, STATE ZIP CODE]
[TELEPHONE]
[FAX]
[EMAIL]

DATE: [DATE]

VIA: ☐ Certified Mail, Return Receipt Requested
☐ Email to: [EMAIL ADDRESS]
☐ Facsimile to: [FAX NUMBER]
☐ Overnight Delivery (FedEx/UPS)
☐ Personal Service

RECIPIENT INFORMATION

[INSURANCE COMPANY NAME]
[CLAIMS DEPARTMENT]
Attn: [CLAIMS ADJUSTER NAME / CLAIMS MANAGER NAME]
[ADDRESS]
[CITY, STATE ZIP CODE]

CLAIM IDENTIFICATION

RE: DEMAND FOR IMMEDIATE PAYMENT - VIOLATION OF PROMPT PAYMENT REQUIREMENTS

Claim Number: [CLAIM NUMBER]

Dear [CLAIMS ADJUSTER / CLAIMS MANAGER]:

This letter constitutes a formal demand for immediate payment of insurance benefits due under the above-referenced claim, together with all statutory interest, penalties, and damages resulting from [INSURANCE COMPANY NAME]'s ("Company") unreasonable and unlawful delay in payment.

I. CLAIM HISTORY AND PAYMENT DELAYS

The Company has failed to comply with statutory prompt payment requirements as follows:

A. Timeline of Events

B. Statutory Deadlines Violated

Under [STATE] law, the Company was required to:

☐ Acknowledge the claim within [#] days of receipt
- Statutory deadline: [DATE]
- Actual acknowledgment date: [DATE] / Not acknowledged
- Days late: [#]

☐ Begin investigation within [#] days of receipt
- Statutory deadline: [DATE]
- Investigation began: [DATE] / Not begun
- Days late: [#]

☐ Request additional information within [#] days of receipt
- Statutory deadline: [DATE]
- Request made: [DATE] / No timely request
- Days late: [#]

☐ Affirm or deny coverage within [#] days of receiving all required information
- Statutory deadline: [DATE]
- Coverage decision: [DATE] / Not yet made
- Days late: [#]

☐ Issue payment within [#] days of coverage determination
- Statutory deadline: [DATE]
- Payment issued: [NOT ISSUED]
- Days late: [#]

II. AMOUNT DUE

A. Principal Claim Amount

B. Statutory Interest and Penalties

Under [STATE] law, the Company is liable for statutory interest and/or penalties for delayed payment:

C. Total Demand

III. STATUTORY AUTHORITY

The Company's failure to make timely payment violates the following statutory requirements:

[STATE] Prompt Payment Requirements

[SELECT AND COMPLETE APPLICABLE STATE SECTION]

☐ TEXAS - Insurance Code Chapter 542

Under Texas Insurance Code Chapter 542 (Prompt Payment of Claims Act):

• Insurer must acknowledge claim within 15 days of receipt (§ 542.055)
• Insurer must begin investigation within 15 days (§ 542.055)
• Insurer must accept/reject claim within 15 business days after receiving all required information (§ 542.056)
• Payment must be made within 5 business days of acceptance (§ 542.057)
• If investigation cannot be completed in 45 days, insurer must provide written notice every 45 days (§ 542.056)

Penalties for Violation:
- 18% annual interest on the amount of the claim
- Reasonable attorney's fees

☐ FLORIDA - Statute § 627.70131 (Property Insurance)

Under Florida Statute § 627.70131:

• Insurer must pay or deny claim within 90 days after receiving notice of initial, reopened, or supplemental claim
• Insurer must begin investigation within 14 days
• Must notify policyholder of claim status within 30 days

Penalties for Violation:
- 12% annual interest on unpaid amount
- 10% penalty (up to $250) if paid within 30 days of demand letter
- Attorney's fees if litigation required

☐ CALIFORNIA - Insurance Code § 790.03(h) and Regulations

Under California Fair Claims Settlement Practices Regulations (10 CCR § 2695.7):

• Insurer must acknowledge claim within 15 days
• Insurer must accept/deny claim within 40 days after receiving proof of claim
• Payment must be made within 30 days of determination

Penalties for Violation:
- Bad faith damages (breach of implied covenant)
- Potential punitive damages
- No statutory interest penalty (common law damages apply)

☐ NEW YORK - Insurance Regulation 64 (11 NYCRR 216.6)

Under New York Insurance Regulation 64:

• Insurer must acknowledge claim within 15 business days
• Insurer must begin investigation within 15 business days
• Claim must be resolved within 30 business days of receiving all requested information

Penalties for Violation:
- Interest on unpaid amount at statutory rate
- Department of Financial Services may impose penalties
- Bad faith damages in appropriate cases

☐ OTHER STATE: [STATE NAME]

Under [STATE STATUTE/REGULATION]:

[DESCRIBE SPECIFIC REQUIREMENTS AND PENALTIES]

IV. GOOD FAITH VIOLATIONS

In addition to violating prompt payment requirements, the Company has acted in bad faith by:

☐ Failing to acknowledge the claim within the required timeframe
☐ Failing to conduct a reasonable and timely investigation
☐ Failing to communicate the status of the claim
☐ Repeatedly requesting duplicative information to delay payment
☐ Ignoring communications from the insured
☐ Failing to provide any explanation for the delay
☐ Offering inadequate partial payments to avoid full liability
☐ Other: _______________________

Specific facts demonstrating bad faith:

_____________________________________________________________________________

_____________________________________________________________________________

_____________________________________________________________________________

V. DEMAND FOR PAYMENT

Based on the foregoing, we hereby demand that [INSURANCE COMPANY NAME]:

1. Pay the full amount of policy benefits due in the amount of $[PRINCIPAL];

2. Pay all statutory interest at the rate of [RATE]% from [DATE PAYMENT WAS DUE] to the date of payment, currently calculated at $[INTEREST];

3. Pay all statutory penalties in the amount of $[PENALTIES];

4. Confirm in writing that payment has been issued and provide tracking information;

5. Pay attorney's fees incurred in connection with this demand.

VI. DEADLINE FOR RESPONSE

THIS DEMAND MUST BE SATISFIED WITHIN [10/15/30] DAYS OF RECEIPT OF THIS LETTER.

Payment Deadline: [DEADLINE DATE]

VII. CONSEQUENCES OF NON-COMPLIANCE

If payment is not received by the deadline stated above, we will take the following actions without further notice:

☐ File a complaint with the [STATE] Department of Insurance
☐ Initiate litigation for breach of contract and bad faith
☐ Seek all compensatory damages, including consequential damages
☐ Seek all available statutory penalties and interest
☐ Seek punitive damages for willful violation of prompt payment requirements
☐ Seek recovery of all attorney's fees and costs
☐ [OTHER ACTION]

VIII. PAYMENT INSTRUCTIONS

Please make payment by check payable to:

[PAYEE NAME]

Mail to:
[ADDRESS]
[CITY, STATE ZIP]

Or wire transfer to:
Bank: [BANK NAME]
Account Name: [NAME]
Account Number: [NUMBER]
Routing Number: [NUMBER]

IX. CONTACT INFORMATION

Direct all communications regarding this matter to:

[YOUR NAME / ATTORNEY NAME]
[ADDRESS]
[CITY, STATE ZIP]
Phone: [PHONE]
Email: [EMAIL]

X. RESERVATION OF RIGHTS

This letter is not intended to be, and shall not be construed as, a waiver of any rights or claims. All rights are expressly reserved, including the right to seek additional damages, penalties, and interest that continue to accrue.

Please govern yourselves accordingly.

Sincerely,

_________________________________
[YOUR NAME / ATTORNEY NAME]
[BAR NUMBER]
[FIRM NAME]

cc: [CLIENT NAME]
[STATE DEPARTMENT OF INSURANCE]

Enclosures:
- Proof of loss documentation
- Correspondence showing delay
- Payment calculations

STATE-SPECIFIC NOTES

CALIFORNIA

• No specific "prompt payment" statute with automatic penalties
• Fair Claims Settlement Practices Regulations (10 CCR § 2695.7) set timeframes
• 15 days to acknowledge; 40 days to accept/deny after proof of claim
• Violation supports bad faith claim for breach of implied covenant
• Punitive damages available with malice, oppression, or fraud

TEXAS

• Texas Insurance Code Chapter 542 is the "Prompt Payment of Claims Act"
• 18% annual interest penalty for late payment (one of highest in nation)
• Attorney's fees recoverable
• Deadlines: 15 days acknowledge, 15 days investigate, 15 business days decide, 5 business days pay
• Written demand not required but strongly recommended

FLORIDA

• Florida Statute § 627.70131 governs property insurance claims
• 90 days to pay or deny from notice of claim
• 12% annual interest on overdue amounts
• 10% penalty (max $250) if paid within 30 days of demand letter
• Civil Remedy Notice (§ 624.155) required before bad faith suit

NEW YORK

• Insurance Regulation 64 (11 NYCRR 216.6) governs timeframes
• 15 business days to acknowledge; 30 business days to resolve after documentation complete
• Interest at statutory rate for late payment
• No specific statutory penalty structure like Texas
• DFS may impose penalties for pattern violations

INTEREST CALCULATION WORKSHEET

Principal Amount: $______________

Interest Rate: ____________% per annum

Date Payment Due: ______________

Date of Demand/Payment: ______________

Number of Days Overdue: ______________

Interest Calculation:

$______________ x ______% / 365 x ______ days = $______________

Running Interest Per Day: $______________

CHECKLIST BEFORE SENDING

☐ Verified all dates and calculations
☐ Confirmed applicable state statutes and deadlines
☐ Calculated interest correctly using state rate
☐ Included all supporting documentation
☐ Set appropriate response deadline
☐ Sent via method that provides proof of delivery
☐ Kept copies of everything
☐ Calendared response deadline
☐ Prepared to follow through if no response