What legal remedies are available to an insured who has suffered a loss due to an insurer's unreasonably late payment of a claim?

When an insured suffers a loss due to an insurer's unreasonably late payment of a claim, both contractual damages and interest on any sums due under the policy can be pursued as legal remedies.

Contractual damages arise from the insurer's failure to fulfill the terms of the insurance contract in a timely manner. This means that if the insurer does not pay on time, the insured may be entitled to damages that result from this breach of contract. Such damages could include compensation for additional losses that the insured faces because of the delay in the payment.

Moreover, when a claim is delayed, the policyholder may also claim interest on the amount of money that is rightfully owed to them. This interest serves as a form of compensation for the time value of money that the insured did not receive when they should have, which reflects the principle that timely payment is not just about the amount owed, but also about the economic impact of that delay.

Thus, acknowledging both types of remedies allows the insured to seek comprehensive compensation for the harms suffered due to the insurer's unreasonable conduct. This principle reinforces the importance of insurers adhering to the timelines established within insurance contracts and the legal protections afforded to insured parties.