Unfair Claims Practice

What Does Unfair Claims Practice Mean?

An unfair claims practice occurs when an insurance company illegitimately attempts to reduce, delay, or alter a claim. Such practices are illegal in many jurisdictions. If a policyholder believes they are subjected to unfair claims practices, they can dispute the claim with the insurer or pursue legal action if necessary.

Insuranceopedia Explains Unfair Claims Practice

Insurance policies are often complex, which can allow perpetrators of unfair claims practices to exploit the likelihood that policyholders have not thoroughly reviewed the entire policy. For example, an insurer might attempt to reduce a payout by citing ambiguous or convoluted policy language in an illegitimate manner. Many policyholders choose to sue insurers they believe are engaging in unfair claims practices.