Which practice is considered an Unfair Claims Settlement Practice?

Failing to explain denial of claims is recognized as an Unfair Claims Settlement Practice because it undermines the principles of transparency and good faith that are essential in the claims handling process. Insurers are required by law to clearly communicate the reasons for denying a claim to ensure that policyholders understand the basis of the decision. This practice protects consumers by allowing them to assess their options, including the possibility of appealing the decision or seeking further clarification.

In contrast, adjusting claims promptly, providing clear explanations for claims, and offering generous policy terms are all behaviors that contribute positively to the claims process and enhance consumer trust in insurance providers. These practices align with regulatory expectations and promote a fair and efficient claims settlement process.