Does an insurance company have to pay interest on no-fault claims in arbitration or litigation?
Yes. Additional personal injury protection benefits that are both mandatory and overdue bear interest at a rate of two percent (2%) per month, calculated on a pro-rata basis using a 30-day month. An insurer must deny or fail to pay a claim within the mandatory 30-day period. If the insurer does not act in one of those two ways, the claim begins to accrue interest at that point, as it has become overdue. If arbitration or a lawsuit is not commenced within 30 days of the receipt of the denial of claim form for payment of benefits, the accrual of interest is paused until an action is begun.