Late Payment Interest on Insurance: When You Can Claim It and Why Almost No One Does

When a claim is filed and the insurance company accepts the coverage, most policyholders assume that the compensation will arrive "when it's due." However, the law doesn't leave this to chance: unjustified delays in payment generate late payment interest, both with private insurers and the Insurance Compensation Consortium.

The surprising thing is that very few policyholders claim this interest, despite being entitled to it.

In this article, we explain when it is due, how it is calculated, and why it is often ignored, even in clearly stalled claims.

What is Late Payment Interest on Insurance?

Late payment interest is a legal penalty applied to the insurer when it fails to pay compensation within the timeframes established by the Insurance Contract Law.

It is not automatic compensation.

It is not applied automatically.

But it exists and can be claimed.

Its objective is to prevent delays from working in favor of the insurer and to the detriment of the insured.

What the law says: clear deadlines

The Insurance Contract Law establishes two fundamental milestones:

• 40 days from the date of the claim to pay the minimum amount due.

• 3 months to pay the full compensation, unless there is a justified reason.

When these deadlines are missed without a valid reason, late payment interest begins to accrue.

When is a delay considered unjustified?

Not all delays generate interest. However, situations like the following do:

• Accepted claims that remain “under review” indefinitely
• Appraisals carried out without a payment proposal
• Administrative blocks without a technical explanation
• Prolonged silence after accepting coverage
• Partial advances without subsequent closure

We frequently see these types of blocks in complex claims, as we explain here: The insurance company is not responding and the claim is stalled

Late Payment Interest at the Insurance Compensation Consortium

There is a common misconception that the Consortium “does not pay interest.”

This is incorrect.

The Consortium is subject to the same legal regime when:

• Coverage is clear
• The damage is documented
• And the delay is not justified by exceptional circumstances

In claims due to DANA storms or extraordinary floods, massive delays do not automatically eliminate the insured's right to compensation.

How Late Payment Interest Is Calculated

The interest rate system in insurance is particularly burdensome for the insurer:

• During the first two years: legal interest rate + 50%
• From the second year onwards: minimum of 20% per year

This means that, in lengthy cases, the interest can reach very significant amounts.

Why Almost No One Claims It

In our experience, late payment interest is not claimed for several reasons:

• lack of knowledge of the law
• fear of “worsening the relationship” with the insurer
• poorly documented claims
• lack of technical advice
• belief that “it’s not worth it”

In reality, introducing this concept often unblocks cases.

When It's Appropriate to Raise Late Payment Interest

It's not a threat.

It's not confrontation.

It's advisable to raise this issue when:

• Coverage has been accepted
• The damage has been assessed
• The claim process is stalled
• There is no real technical reason for the delay

In many cases, simply properly stating this right changes the insurer's attitude.

Relationship with Expert Appraisals and Blocked Claims

Late payment interest often appears in claims with:

• Undervalued appraisals
• Endless reviews
• Lack of an active expert appraiser
• Technically complex claims

We analyze these scenarios in detail here: Undervalued Appraisals: Why They Occur

What the Insured Can Do

When there is an unjustified delay, the insured can:

• Demand written explanation for the delay
• Claim late payment interest
• Reorganize the claim technically
• Appoint their own expert appraiser
• Properly escalate the claim

We explain the complete process here: Damage to Homes and Businesses: How to Claim from the Insurance Company

Conclusion

Delays in Compensation It's not just a nuisance: it can generate additional financial entitlement for the insured.

Late payment interest exists, it's regulated, and when applicable, shouldn't be ignored.

In many cases that have been stalled for months, this entitlement makes the difference between accepting the delay or rectifying it.

Has your compensation been unpaid for months?

We analyze unjustified delays, stalled cases, and claims against insurance companies and the Consortium.

Sometimes, taking the right approach changes everything.

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