Auto Insurance Claims: Auto Insurance claims involving fatality, automobile accident, liability limit

Question
I am a California resident who just suffered the death of a love one in an
automobile accident. The certificate sites that the deceased lost control of his
vehicle and collided into another. Some one recklessly made a comment that
he was racing when there was no evidence of this. Consequently, the police
are investigating this. The incident was posted multiple times on the internet
by an irresponsible reporter who sites "A street racer dies". When I called the
insurance company, I was told that this claim will not likely be settled at all.
She said that they had their personal investigators on the case. The police
reported to the next of kin that the individual was speeding while passing
another car "NOT DRAG RACING". Can the claim be denied based on speeding
? How long can the insurance delay settlement pending this investigation?

Answer
Hi Peaches-

I am terribly sorry to hear about your loss.  

When an accident happens it is separated out into two claims.  Property damage and personal injury.  The property damage claim is usually handled fairly quickly.  If your loved one had comprehensive and collision on his car, his company should pay for the damage to his car and the other car if he had high enough property damage limits to cover the damages.  

If he injured someone else in the accident, the statute of limitations is 2 years and will most likely take at least a year and most likely 2 or more years depending on the seriosness of the injuries of the other person and if they are still treating.  

What I think the insurance company is saying when they say they are not going to settle the claim is that it will go all the way to a jury trial.  The average jury trial award is around $320,000 but it really depends on medical costs and lost wages etc.    

The insurance company will pay up to the liability limit and the rest will come from any assets or income of the estate.

This is exactly why in my agency I almost always recommend people have at least 250,000 per person and $500,000 per accident for both Bodily injury and Uninsured motorist.  If they are a homeowner in California I always recommend an umbrella to extend the liability by another 1 million.
If the person is a high wage earner, there is even the option to add uninsured motorist protection to an umbrella to protect the lost wages up to 1 million dollars or more.

Whether he was speeding or racing should not matter. His insurance company should represent the insured and pay damages up to the limits of the policy.