An unfair insurance claim practice is where an insurer attempts to reduce the amount of a claim or avoid payment altogether. The National Association of Insurance Commissioners has crafted a set of regulations and laws in an effort to reduce unscrupulous behavior by insurers.
What Are Some Examples of Unfair Insurance Claim Practices?
These are some characteristics that may indicate the provider is engaging in unfair insurance claim practices:
- An insurer claims to have a policy of appealing any arbitration awards that claimants win, in an effort to compel claimants to accept settlements or compromises out of court for a lesser amount
- Convincing claimants not to opt for litigation by offering a claimant substantially less than he would get if he sued in court
- Not trying to reach a quick, equitable settlement where fault is clear
- Refusing to pay a claim without an exhaustive investigation of seemingly extraneous information about the claim
- Not having a set of standards for investigating claims falling under an insurance policy
- Not reacting in a reasonable amount of time to claims made
- Not telling the whole truth or lying about certain provisions of an insurance policy concerning what is and is not covered under the policy
- Offering a reason for the denial of a claim or for the offer of a settlement in an unreasonably short period of time
- Delaying an investigation of a claim by requiring the opinion of an expert, like a physician, to submit to different reports, when doing so seems unnecessary or would likely not uncover new information.
Keep in mind that insurance is a complicated business, and emotions may run high. Thus, these characteristics are not dispositive, but merely indicate the attitude and approach of providers who may be engaging in unfair practices.
Should I Consult a Lawyer?
If you have a claim that your insurance provider should cover under your policy, but refuses to, the provider may have acted in bad faith, and you should immediately contact a business lawyer who has experience dealing with insurance claims and bad faith. Your attorney can advise you of you rights and let you know if you have a case and would be entitled to any monetary damages in a lawsuit against your insurance provider.