Insurance carriers must act in good faith in all dealings with their policyholders. Insurance should help people when they need it most. When you suffer a loss, insurance delays and denials inflict further harm that insurance was designed to avoid. Since few know how insurance works, the industry and courts have adopted informal "rules of the road" to guide insurance companies on how they should behave and not behave. Here are a few rules:
- Insurers should give equal consideration to their insured's financial interests as they do their own.
- Insurers should investigate an insured's claim for benefits.
- Insurers should not deny claims based on a hunch, guess or suspicion.
- Insurers should not deny claims based on information not contained in their files.
- Insurers should not deny claims without substantial justification.
- Insurers should let the insured know why the claim is not being paid or being delayed.
- Insurers should not delay or deny a claim based on biased one-sided information.
- Insurers should give the insured factual reasons why the claim is delayed or denied.
- Insurers should not "lowball" insureds by offering unreasonably low amounts.
- Insurers should tell insureds of all coverages available and how to obtain the benefits paid for.
- Insurers should tender all amounts not in dispute and not try to leverage a lower payout by withholding undisputed amounts owed.
- Insurers can fairly debate the value of a claim only if they engage in a fair debate.
