If an insurer needs more time to come to a decision on a claim, what must they do?

When an insurer requires additional time to make a decision regarding a claim, the most appropriate action is to notify the insured of a delay. This is essential because it ensures transparency and maintains trust in the insurer-insured relationship. By informing the insured about the delay, the insurer adheres to ethical standards and regulatory requirements that emphasize prompt communication regarding claims processing. This notification allows the insured to understand the status of their claim and sets clear expectations about potential timelines for resolution.

In many jurisdictions, insurers are legally obligated to keep the insured informed during the claims process, especially when there are delays. This communication is not only a good practice but serves to protect the rights of the insured while also fulfilling the insurer's duties.

Other options, while they may seem viable, do not align with the requirement to maintain clear communication and transparency. For instance, accepting the claim provisionally might imply a commitment to coverage that the insurer is not yet ready to honor, and starting to provide partial benefits could complicate matters if the final decision on the claim is different than anticipated. Filing for an extension with regulators could be a procedure used in some cases, but it does not address the immediate need to inform the insured.