California has a fair claims settlement regulation in place for consumers regarding insurance claims such as the one you are asking about.
California Code of Regulations Section 2695.4 notes that every insurer shall disclose first party claimant or beneficiary, all benefits, coverage, time limits or other provision of any insurance policy issued by that insurer that may apply to the claim presented by the claimant. When additional benefits might reasonably be payable under an insured's policy upon receipt of additional proofs of claim, the insurer shall immediately communicate this fact to the insured and cooperate with and assist the insured in determining the extent of the insurer's additional liability.
The Fair Claims Settlement Regulation itself can be hard to read so the CA Department of Insurance (CDI) has given a basic description of what consumer rights it gives you. In general with this CA regulation, insurance companies are required to do the following:
- Advise you of all benefits, coverage, time limits or other provisions of your insurance policy.
- Acknowledge claim, start investigation, provide forms and instructions, and provide reasonable assistance immediately but in no event later than 15 days after receiving notice of claim. (Notice of claim is any written or oral communication to the insurance company which reasonably apprises the insurer that you wish to make a claim.)
- Respond to communications received from you immediately but in no event later than 15 days.
- Accept or deny the claim immediately but in no event later than 40 days after receiving proof of claim. (Proof of claim is documentation in your possession which provides any evidence of the claim and supports the magnitude or the amount of the loss such as estimates of repair or police report indicating theft of your vehicle, et cetera.)
- Unless the insurer has provided you with the name of a specific towing company prior to your using a towing facility, the insurer must pay reasonable towing expenses.
- Offer a fair settlement. If you suffered a total loss, settlement must include taxes, license and transfer fees. The settlement must reflect the value of a comparable vehicle of like kind and quality. If you retain the salvage, deductions from the settlement for salvage must be fair, measurable, and discernable.
- Once the claim has been accepted, the insurer must pay the claim immediately, but in no event later than 30 days from the date settlement was reached.
- Advise you whether or not they will pursue subrogation. If the insurance company pursues subrogation, they must include your deductible unless you have already recovered your deductible.
The above represents a paraphrased brief overview of some of the Fair Claims Settlement Practices Regulations effective 5/10/97 since (with some amendments to them since then). You may view a complete copy of the Regulations by visiting the California Department of Insurance website.
So regarding your specific question about how long an insurance company has to arson investigate and settle or deny a claim involving automobile arson question, first this would be a claim through your Comprehensive coverages since it deals with your car being on fire and with arson that would normally be considered vandalism. As mentioned above an insurance company has to accept or deny a claim immediately but in no event later than 40 days after receiving proof of claim.
The insurer may ask for more time to investigate a claim though. Section 2695.7 of the Fair Claims Settlement states in part:
(c)(1) If more time is required than is allotted in subsection 2695.7(b) [40 days] to determine whether a claim should be accepted and/or denied in whole or in part, then, every insurer shall provide the claimant, within the time frame specified in subsection 2695.7(b) [again no more than forty (40) calendar days], with written notice of the need for additional time. This written notice shall specify any additional information the insurer requires in order to make a determination and state any continuing reasons for the insurer's inability to make a determination. Thereafter, the written notice shall be provided every thirty (30) calendar days until a determination is made or notice of legal action is served. If the determination cannot be made until some future event occurs, then the insurer shall comply with this continuing notice requirement by advising the claimant of the situation and providing an estimate as to when the determination can be made.
As for denials of a claim under 2695.7(b)(1) it states:
Where an insurer denies or rejects a first party claim, in whole or in part, it shall do so in writing and shall provide to the claimant a statement listing all bases for such rejection or denial and the factual and legal bases for each reason given for such rejection or denial which is then within the insurer's knowledge. Where an insurer's denial of a first party claim, in whole or in part, is based on a specific policy provision, condition or exclusion, the written denial shall include reference thereto and provide an explanation of the application of the provision, condition or exclusion to the claim.
So your insurer should tell you within 40 days if your claim for the arson affecting your vehicle is accepted or denied. If they need more time to investigate the claim than they should give you written notice of the need for additional time. They must continue every 30 days to inform you in writing if they need more time and must tell you the reasons for their inability to make a determination the claim.
If it ends up that your insurer denies your claim for the arson claim than they will need to do so in writing and explain to you in detail why they have rejected your Comprehensive claim for the fire damage to your vehicle.
If you have been waiting awhile for your arson claim to be accepted, denied or settled and they have not followed these procedures than you should contact the CDI for consumer advice about what you should do and if you may need to make a complaint for the CDI to investigate how your insurer is handling your arson claim.