Dwelling Policy Practice Test

If both the insurer and the insured agree on the loss amount, how long does the insurer have to make payment after receiving proof of loss?

1. 30 days

2. 45 days

3. 60 days

4. 90 days

The correct answer is: 60 days

When both the insurer and the insured have agreed on the amount of the loss, the insurer is obligated to make the payment promptly to honor the terms of the insurance policy. In many jurisdictions, specifically under the provisions established in insurance regulations, the insurer typically has a timeframe of 60 days to make that payment after they have received the necessary proof of loss documentation. This timeframe ensures that the insured party receives the compensation owed in a timely manner, reflecting the promptness and efficiency principles essential in insurance practice. The ability to settle disputes effectively and quickly is vital to maintaining trust in insurance relationships and fulfilling contractual obligations. The longer timeframes listed in other choices exceed what is generally mandated, which may lead to unnecessary delays in the compensation process.