Final answer:
The most likely reasons for an insurer to delay a client's claim are administrative issues such as incorrect wording of diagnosis, incomplete forms, misfiled forms, and illegible handwriting, as well as the investigation of potential fraudulent claims.
Step-by-step explanation:
The two most likely reasons an insurer will delay a client's claim are often related to administrative issues or policy specifics. In this context, the options incorrect wording of diagnosis and incomplete forms (1) as well as misfiled forms and illegible handwriting (2) are typical administrative hurdles that cause delays. Claims might also be delayed due to more complicated issues such as the need to investigate potential fraudulent claims (4) or because there is an investigation into the claim's validity due to reported experimental medications or other factors that introduce additional risk considerations for the insurer.
Insurance companies face the challenge of dealing with imperfect information and must categorize individuals into risk groups. This can lead to controversies, especially when past events like major accidents are taken into account. Insurers must balance the need to adequately manage risk while providing timely service to their policyholders.
Administrative errors or policy conditions can affect claim processing times. Insurance markets experience issues like adverse selection, where high-risk individuals are more likely to seek insurance than low-risk individuals, potentially driving up costs and affecting how insurers manage and process claims.