How do I know if an insurance adjuster is mishandling my claim?

In 1959, the National Association of Insurance Commissioners (NAIC) authored and introduced the Model Unfair Trade Practices Act (MUTPA). The MUTPA first incorporated uniform standards for how insurance claims should be handled. 

In 1990, the claims handling provisions were formed into their own freestanding law, the Model Unfair Claims Settlement Practices Act.  This Act provides minimum standards for insurance adjusters while handling claims. 

Most states have now adopted some version of the Model Act.  Illinois has adopted the Act’s standard claims law, which is found in the Illinois Insurance Code. 

How do I know if an insurance adjuster is mishandling my claim?

In Illinois, an insurance adjuster may be mishandling your claim if they’re doing any of the following actions:

• Knowingly misrepresenting to claimants and insureds (or policyholders) relevant facts or policy provisions relating to coverages;
• Failing to acknowledge within a reasonable time important communications with respect to claims arising under its policies;
• Failing to adopt and implement reasonable standards for prompt investigations and settlement of claims arising under its policies;
• Not attempting in good faith to secure prompt, fair, and equitable settlement of claims where liability is reasonably clear;
• Requiring policyholders to file lawsuits to recover amounts due under its policies by offering substantially less than the amounts ultimately recovered in those lawsuits;
• Engaging in an activity which results in a disproportionate number of worthy complaints against the insurer to the Insurance Department;
• Engaging in an activity which results in a disproportionate number of lawsuits to be filed against the insurer or its insureds by claimants;
• Refusing to pay claims without conducting a reasonable investigation based on all available information;
• Failing to affirm or deny coverage of claims within a reasonable time after proof of loss statements have been completed;
• Attempting to settle a claim for less than the amount to which a reasonable person would believe the claimant was entitled, by reference to written or printed advertising material accompanying or made part of an application or establishing unreasonable caps or limits on paint or materials when estimating vehicle repairs;
• Attempting to settle claims on the basis of an application which was altered without notice to, or knowledge or consent of, the insured;

Here are more ways they can mishandle claims:

• Making the payment of a claim to a policyholder or beneficiary omitting the coverage under which each payment is being made;
• Delaying the investigation or payment of claims by requiring an insured, a claimant, or their physicians, to submit a preliminary claim report and then requiring the subsequent submission of formal proof of loss forms, resulting in the duplication of verification;
• Failing in the case of the denial of a claim or the offer of a compromise settlement to promptly provide a reasonable and accurate explanation of the basis in the insurance policy or applicable law for such denial or compromise settlement;
• Failing to provide forms necessary to present claims within 15 working days of a request with such explanations as are necessary to use them effectively;
• Failing to adopt and implement reasonable standards to verify that a repairer designated by the insurance company to provide an estimate, perform repairs, or engage in any other service in connection with an insured loss on a vehicle is properly licensed under the Illinois Vehicle Code;
• Failing to consistently provide a notification on any written estimate prepared by an insurance company that Illinois law requires that vehicle repairers must be licensed in accordance with the Illinois Vehicle Code;
• Engaging in any other acts which are in substance equivalent to any of the above.

Above all, an insurance company has an obligation to treat its policyholders’ interests with equal consideration to that of its own interests.  In other words, insurance companies must not put their own interests first. 

Questions? Contact us today.

If you have been harmed by the wrongful conduct of an insurance company, you should contact the attorneys at Shannon Law Group to discuss your situation.

You can call us 24/7 at (312) 578-9501. You can fill out the form at the bottom of this page. Our consultations are always free.