Odds are strong that you will reach a point in your life when you need to file a claim with an insurance company to obtain compensation for an injury, damages, or losses. Unfortunately, you may encounter an insurance company that engages in what fairly can be classified generally as unfair claims settlement practices. There are a number of different types of unfair claims settlement practices engaged in by insurance companies across the United States. The most commonplace unfair claims settlement practices engaged in by insurance companies can be classified in one of four categories:
- Misrepresentation or alteration
- Unreasonable requirements
- Lack of due diligence
- Timeliness issues
Definition of Unfair Claims Settlement Practices
The National Association of Insurance Commissioners (NAIC) has developed what is known as the Uniform Unfair Claims Settlement Practices Act or UCSPA. The UCSPA defines an unfair insurance claims settlement practice as:
“The improper handling of policyholder claims on the part of insurers that violates state laws on unfair claims settlement.”
The uniform act, or some derivation of it, is the law in nearly all states in the United States.
Misrepresentation or Alteration
Misrepresentation of alteration is one of the most frequently occurring types of unfair claims settlement practices. The most commonly occurring unfair claims settlement practices in the misrepresentation or alteration category are:
- Misrepresenting relevant facts
- Misrepresenting insurance policy provisions
- Making a significant alteration in an application without consumer consent
- Attempting to settle a claim based on an unapproved insurance application
- Settling a claim for less than reasonably would be expected based on advertising by an insurance company
Another unfair claims settlement practice that occurs relatively regularly in the United States is one in which unreasonable requirements are placed upon a claimant during the claims settlement process. Two of the most regularly recuring of such unreasonable requirements are:
Offering such a small settlement amount that a consumer has no alternative but to file a lawsuit
Demanding written verification of a loss after you have previously submitted a completed proof-of-loss form (in other words, being required to do the same thing more than once in an effort to delay settlement of a claim)
Lack of Due Diligence
Another unfair claims settlement practice utilized by some insurance companies involves a lack of due diligence on the part of an insurer to complete the claim settlement process. Two primary ways this occurs are:
Failing to adopt standards associated with a reasonable investigation of a claim for compensation
Refusing to pay claims without even conducting a reasonable investigation
Timeliness issues are also among the most commonplace insurance company unfair claims settlement practices. Among the most frequent timeliness related schemes include:
- Failure to respond promptly to claimant communications
- Failure to confirm or deny coverage within a reasonable time period
- Failure to provide prompt explanation of denial of coverage or offer a compromise settlement
- Failure to provide claim forms within a specific time after requested by a claimant
- Failure to make a prompt, fair settlement even when a valid claim is submitted and an insurer clearly is liable or responsible
If you find yourself experiencing problems settling a claim with an insurance company similar to those issues discussed here, an insurance claims attorney from The Doan Law Firm is available to you to discuss your important legal rights and interests. A nationwide law firm founded by Jimmy Doan (who remains involved in all cases at the practice), we’ve offices located across the country in 40 cities. As a result, we can schedule an appointment for with an experienced insurance claims lawyer at any one of our offices, at your home, or at any other location that meets your needs. We can also arrange a virtual appointment with an insurance claims lawyer online as well.
You can connect with The Doan Law Firm any time of the day or night by calling us at (800) 349-0000. Our insurance claims lawyer phoneline is staffed 24 hours a day, 365 days a year, including all major holidays.
There is no cost and no obligation for an initial consultation and case evaluation with a Doan Law Firm insurance claims attorney. Indeed, our firm never charges at attorney fee unless we win your case for you. Our legal team will fight tirelessly on your behalf for justice and the compensation you deserve.