When must an insurer pay interest on a claim?

An insurer is required to pay interest on a claim from the date on which they received the claim. This timing is important because it establishes a clear point in time from which the insured can expect to receive not only the principal amount of the claim but also any additional compensation in the form of interest. This ensures that the insured is fairly compensated for the time they have to wait for their claim to be processed and paid.

In the context of insurance claims, the obligation to pay interest serves as an incentive for insurers to handle claims promptly and efficiently. By measuring interest from the date the claim was received, the law encourages insurers to act in good faith and settle claims without unnecessary delay. While disputes may arise during the claims process, the presence of a dispute does not change the insurer's obligation to begin accruing interest from the date of receipt of the claim.

Therefore, understanding when interest accrues is critical for both insurers and claimants in ensuring fair treatment under insurance contracts.