Bad Faith Claims Settlement Regulations

Following are a sampling of the standards that apply under the "Unfair Claims Settlement Practices Act".  These restrictions serve to form a basis for Bad Faith Claims actions against insurance companies. 

The regulations were established by the National Association of Insurance Commissioners, and exist in one form or another in most all states.  You can find more on the regulations related to your state with a simple web search.

Among others, these applicable regulations place the following burdens on insurance companies in the interest of combating insurance bad faith claim handling.

• Insurance claims must be promptly acknowledged and acted upon.  Some states additionally require that actions must be taken within a defined period of time.

• Insurance companies are required to implement and apply strict standards for prompt investigations of all insurance claims.

• Insureds must be kept abreast of the progress of the insurance investigation, and the insurance claim.

• All claim investigations must be conducted in a manner which is reasonable and timely.

• Insurance claim settlements must be reasonable, and must not fall below reasonable expectations.

• The insurance company cannot use unreasonable and repetitive demands for documents and information as a means to delay your claim.