What constitutes unfair claims practices?

Unfair claims practices are actions taken by insurers that can harm policyholders or beneficiaries, often by not adhering to the legal and ethical obligations of fair treatment in the claims process. One key aspect of these practices includes delaying the claims review process without valid justification. When an insurer unreasonably delays a claims review, it can cause significant distress and financial hardship for the claimant, as they may be relying on the benefits from the claim to address immediate needs. Such delays can be viewed as an obstructive tactic to deny essential service and support to policyholders.

In contrast, actions such as settling claims quickly (provided there is a thorough review) or conducting audits before a settlement can be part of a responsible claims-handling process intended to ensure accuracy and prevent fraud. Denying claims based on customer service feedback can raise concerns but does not directly align with the fundamental concept of unfair claims practices, which primarily focuses on unreasonable delays and the failure to address claims in a timely manner.