Unfair Claims Practices - Has Your Insurance Company Or Adjuster Handled Your Claim Unlawfully?
Unfair Claims Practices
Insurance companies refused to settle thousands of claims after Hurricanes Katrina and Rita and showed America just what Unfair Claims Practices can look like. But Unfair Claims Practices happen in more than just hurricanes losses. Insurance companies deny and delay claims on a very regular basis.
What do you do when your insurance company drags its feet and will not settle your claim? How do you tell what actions are just simply annoyingly poor customer service, and what actions violate the law?
How do you know if your insurance company is treating you fairly and lawfully after you have filed an insurance claim?
Every state has Unfair Claims Practices regulations to protect policyholders and claimants from being abused by insurance companies in the claims process.
A state regulator's primary task is protecting the interests of insurance consumers. Check with your state's Department of Insurance to find out the regulations in your state.
Let me give you some examples of Unfair Claims Practices:
* Attempting to settle a claim based on an application which the company changed without the insured's knowledge or permission. The simplest example of this is when an insurance company changes the date of the application. But it could be any information on the application that might be altered.
* Failing to act promptly after receiving information concerning an insurance claim. Many states require response within 15 days. When there's a storm like Katrina, you might have to wait weeks to meet your adjuster. But that might be an Unfair Claims Practice.
* Delaying a claim investigation by requiring unnecessary reports or documents which contain substantially the same information. Recently I witnessed a major well-known insurance company send a claim to their Special Investigations Unit (SUI), and then take recorded statements from the insureds...and then ask the insureds to submit to an Examination Under Oath. In my opinion, that was Unfair Claims Practice perpetrated by that insurance company.
* When applicable, failing to pay a claim quickly, fairly and equitably. Unethical insurance companies could just stonewall you by telling you it is still investigating your claim.
* Failing to promptly settle claims where liability is reasonably clear under one portion of the policy to influence settlements under any portion of the insurance policy coverage. For example, your auto insurer can't refuse to pay your bills under the medical coverage in your policy so you'll settle your uninsured motorist claim.
* Failing to promptly and clearly explain the policy or the law for either denying a claim or offering a compromise settlement. If you get a denial letter for your claim, the letter should quote the policy language directly that applies. No quote, could be Unfair Claim Practice.
* Attempting to persuade insureds not to invoke and use the arbitration process. Also, an insurance company is prevented from appealing almost all of the arbitration awards in favor of policyholders as a way to force a settlement of claims.
* Misrepresenting significant facts or insurance policy provisions. Insurance companies sometimes deny claims on their misinterpretation of the policy. Then, it's up to you to change their minds.
* Refusing to tell an insured what is happening with a loss within a reasonable time after receiving a completed proof of loss statement. Many policies require the insurance company to accept or deny the proof of loss within 30 days after receiving it. It's in your policy...read it.
* Denying claims without a reasonable loss investigation. The problem comes with the definition of "reasonable." Still, insurers sometimes try to settle a claim using a "lowball settlement offer" without much investigation, just to see if they can make the claim go away.
* Offering very low settlements to encourage insureds to sue. That would cause the length of time for a claim settlement to stretch out, possibly for years. The only ones who benefit from that delay are the insurance company...and the attorneys
* Settling claims for less than the amounts a reasonable person would expect. Insurance companies regularly make "lowball offers" for settlements to their own policyholders as well as third-party claimants. The insurers will pay the LEAST amount of money in a settlement that the policyholders or claimants will accept...always. That's one way to maximize profits.
If you think that your insurance company examiner or adjuster is has committed an Unfair Claims Practices action, talk to that person's supervisor. If the situation doesn't improve or get entirely resolved, file a complaint with your state's insurance department.
Copyright 2008 by Russell D. Longcore
P.S. I wrote a book that YOU need!
check out: http://www.insurance-claim-secrets.com
NUMBER ONE at Amazon.com in its category!
My blog is at: http://insurance-claim-secrets.blogspot.com/
Nominated for Georgia Author of the Year Award 2008
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