Months of silence from a long-term care insurer, shifting document requests, and vague responses serve a purpose: to exhaust you until you give up—or until they've built a paper trail that makes a denial look justified.
This pattern has a name. It's called a delay tactic, and when it ends in a wrongful denial, it may be insurance bad faith.
The Playbook: How Delay Becomes Denial
Most policyholders expect an insurance company to review their claim, approve or deny it, and explain why. That's how the process is supposed to work. What often happens instead looks more like this:
The insurer acknowledges the claim but drags out the investigation for months without a clear timeline. Document requests arrive one at a time—first medical records, then a physician statement, then an updated plan of care—each reset stretching the process further. When you follow up, you get vague reassurances that the claim is "under review." Then, after all that waiting, a denial letter arrives citing "insufficient documentation" or "failure to cooperate."
The documentation was submitted. You cooperated with every request. The failure wasn't yours.
This sequence—delay, document demands, more delay, denial—is not a bureaucratic accident. When insurers use it with the specific intent of manufacturing a reason to deny, it may constitute insurance bad faith under both California and Arizona law.
What "Reasonable Promptness" Actually Means Under the Law
Both California and Arizona impose specific legal obligations on how insurers must handle claims. These aren't aspirational guidelines. They're binding requirements, and violating them creates legal exposure.
California's Requirements
California's Fair Claims Settlement Practices Regulations establish hard deadlines for insurance companies. Under California Code of Regulations Title 10, Section 2695.7(b), an insurer must accept or deny a claim within 40 calendar days of receiving proof of claim. Extensions are permitted, but only in writing and only when the delay is for reasons outside the insurer's control.
California Insurance Code Section 790.03 goes further, defining what constitutes unfair claims settlement practices. Among the prohibited conduct:
- Failing to acknowledge and act reasonably promptly on communications about a claim
- Failing to adopt and implement reasonable standards for the prompt investigation and processing of claims
- Failing to affirm or deny coverage within a reasonable time after proof of loss has been submitted
- Not attempting in good faith to reach a prompt, fair settlement when liability is reasonably clear
- Requiring an insured to submit a preliminary claim report and then a formal proof of loss form containing substantially the same information—a practice the statute specifically identifies as a delay tactic
Every insurance contract in California also carries an implied covenant of good faith and fair dealing. Insurers must give at least as much consideration to your interests as to their own, conduct an unbiased investigation, and apply policy language reasonably. When an insurer uses delay to manufacture grounds for denial, it may breach that covenant.
Arizona's Requirements
Arizona's Unfair Claims Settlement Practices Act (A.R.S. § 20-461) and the related regulations under Arizona Administrative Code R20-6-801 impose similar obligations.
Under Arizona's rules, insurers must acknowledge a claim within 10 working days and complete their investigation within 30 days of receiving notification of the claim. If more time is genuinely needed, the insurer must notify the policyholder in writing every 45 days explaining why a decision has not been reached. Silence beyond these windows is a regulatory violation—and it can also serve as evidence of bad faith in litigation.
Arizona's Supreme Court has ruled that an insurer cannot use delay and lowballing as a strategy to wear down a policyholder. The court was explicit: insurers cannot "force an insured to go through needless adversarial hoops" to get benefits they're owed. That principle applies directly to the delay-to-denial pattern — and it means delay isn't a neutral act when it's used with intent to avoid payment.
The Tactics That Cross the Line
Not every slow claim is bad faith. Legitimate investigations take time, and complex LTC claims involving cognitive impairment or multiple care settings may genuinely require additional documentation. The line gets crossed when delay is used as a strategy rather than a consequence of thorough review.
Rotating document requests. Instead of providing a single, complete list of what's needed, the insurer requests documents one category at a time. Once you submit the medical records, they ask for the physician statement. Once you submit that, they want an updated nursing assessment. Each round extends the clock without ever getting closer to a decision.
Biased medical reviewers. Rather than accepting your treating physician's assessment of your need for care, the insurer retains its own reviewer—often someone who has never examined you—to dispute the clinical findings. This is particularly damaging in LTC claims, where the treating doctor's determination of your ability to perform Activities of Daily Living carries significant legal weight.
Repeated requests for the same information. California Insurance Code Section 790.03(h)(11) specifically prohibits requiring a preliminary claim report and then a formal proof of loss form containing substantially the same information. Arizona's Unfair Claims Settlement Practices Act echoes this prohibition. When an insurer asks you to submit and then re-submit the same documentation, that's not diligence—it's a documented unfair practice.
Claiming documentation wasn't received. Some insurers deny receipt of materials that were clearly submitted, forcing policyholders to resubmit while the clock runs. Without records of every submission—dates, method, confirmation—the policyholder has no way to prove the delay was manufactured.
Denial without investigation. A denial issued before the insurer has completed a reasonable investigation of the claim isn't a denial based on evidence—it's a guess used to shift the burden back to you. Under both California and Arizona law, insurers are required to conduct a reasonable investigation based on all available information before refusing to pay.
Your Insurer Could Owe You More Than Just the Denied Benefits
Long-term care insurance is always state-regulated — which means your insurer could face punitive damages, attorney fees, and more than just the benefits they denied. What's available depends on where you live. See which states provide the strongest bad faith protections and what filing deadlines apply to your claim.
What's at Stake When the Tactic Works
The practical effect of delay is financial and physical pressure. Policyholders who need long-term care now—for Alzheimer's, Parkinson's, post-stroke recovery, or the loss of basic daily function—cannot wait months for an insurance company to find its paperwork. Home health aides, assisted living placements, and nursing care don't pause while claims are under review. Those costs come out of pocket.
For many policyholders, especially those on fixed incomes or depleting retirement savings, the financial pressure of paying out of pocket during an extended delay is exactly what the insurer is counting on. The strategy works because most people eventually stop fighting.
That's what bad faith litigation is designed to address.
What You Can Recover Beyond the Denied Benefits
When an LTC insurer's delay-to-denial conduct rises to the level of bad faith, California and Arizona policyholders may be entitled to recover more than just the benefits that were wrongfully withheld.
In California, bad faith victims can seek compensatory damages for the economic harm caused by the delay—costs incurred while waiting for benefits that should have been paid. Emotional distress damages are available when the insurer's conduct was unreasonable and caused genuine suffering. Attorney's fees incurred specifically to recover the policy benefits are recoverable from the insurer under California's Brandt fee doctrine. And in cases of egregious conduct, punitive damages may be available to punish the insurer and deter similar behavior.
California also provides strong additional protection for older policyholders. Under California's Elder and Dependent Adult Civil Protection Act (Welfare & Institutions Code § 15600 et seq.), a wrongful denial of LTC benefits may constitute financial elder abuse when it deprives an elder of property or benefits they are owed, particularly when the insurer knew the policyholder met the policy requirements and denied anyway. This opens a separate avenue for recovery beyond the standard bad faith framework.
In Arizona, bad faith victims can recover more than just the withheld benefits. Arizona courts recognize that the financial harm caused by an insurer's unreasonable conduct — out-of-pocket care costs, depleted savings, emotional distress — can be recovered as consequential damages. In serious cases, punitive damages are available as well.
What You Should Be Documenting Right Now
If you're in a long-term care insurance dispute and feel like the process has stalled without explanation, the records you keep now will matter enormously later.
Log every contact with the insurer—date, time, name of representative, what was said, what was promised. Keep copies of everything you submit, with confirmation of delivery where possible. Save every document request and every response. If the insurer told you one thing in March and something different in May, that inconsistency is part of the record.
Request your claim file. You have a right to it. The insurer's internal notes, medical reviewer communications, and adjuster activity logs often tell a very different story than the denial letter you received. An attorney reviewing that file will know what to look for.
Deadlines matter here. In California, the bad faith tort claim generally carries a two-year statute of limitations from the denial; the contract claim is four years. In Arizona, the bad faith tort is two years, but the breach of contract claim runs six years. Which clock applies — and when it starts — depends on how the case is framed and the specific facts. We've written a fuller breakdown of why insurance bad faith and contract claims carry different deadlines if you want to understand the distinction. These deadlines are firm regardless. Waiting too long can forfeit rights that the law specifically protects.
When a Lawyer Changes the Outcome
An experienced LTC insurance attorney knows how to identify delay tactics in a claim file and how to establish the pattern required to support a bad faith case. They can also stop the rotating requests. Once an insurer knows a policyholder has legal representation, the dynamic shifts—insurers are less likely to manufacture further delays when doing so creates documented evidence of bad faith.
If your LTC insurer has kept you waiting for months without a clear answer, asked you for the same records twice, or issued a denial citing "insufficient documentation" after you submitted everything you were asked for, the process may not have been what it appeared. Sandstone Law Group represents policyholders in California, Arizona, and nationwide who are facing exactly this situation. Call (602) 615-0050 or reach out online for a free case evaluation.
Note: This article discusses some aspects of California and Arizona law as they apply to long-term care insurance claims handling. Laws vary by state and by the specific facts of each claim. Nothing here constitutes legal advice for your particular situation.