Massachusetts Health & Accident Insurance Practice Exam

How long does an insurer have to contest the validity of a claim under the time limit on certain offenses provision?

1. 30 days

2. 60 days

3. 90 days

4. No limit

The correct answer is: 90 days

The correct answer is that an insurer has 90 days to contest the validity of a claim under the time limit on certain offenses provision. This time frame is established to ensure that claims are reviewed in a timely manner and allows the insurer adequate opportunity to investigate any issues or discrepancies related to the claim. This provision is in place to maintain a fair process for both parties; it protects consumers from indefinite delays while also ensuring that insurers can address potential fraud or inaccuracies. If an insurer does not contest a claim within this 90-day window, they typically lose the right to deny the claim based on those particular grounds. In contrast, time frames shorter than 90 days may not provide sufficient time for a thorough investigation of the claim. On the other hand, having no limit could lead to prolonged uncertainty for the policyholder regarding the status of their claim, which is not in line with consumer protection principles. Thus, the 90-day contest provision strikes a necessary balance between the rights and responsibilities of insurers and policyholders.