Unfair Claims Practice

AAA

DEFINITION of 'Unfair Claims Practice'

The improper avoidance of a claim by an insurer or an attempt to reduce the size of the claim. By engaging in unfair claims practices an insurer tries to reduce its costs. However, this is illegal in many jurisdictions.

INVESTOPEDIA EXPLAINS 'Unfair Claims Practice'

The National Association of Insurance Commisioners (NAIC) has created legislation that states that claims be handled fairly and that there is clear communication between the insurer and the insured. Because of this legislation, many states have implemented unfair claims practice laws.

RELATED TERMS
  1. Fake Claims

    The term fake claims refers to insurance claims that are made ...
  2. Contract Holder

    An individual or organization who owns the rights to a debt or ...
  3. Insurance

    A contract (policy) in which an individual or entity receives ...
  4. National Association of Insurance ...

    A nationwide organization whose main responsibility is to protect ...
  5. Insurance Claim

    A formal request to an insurance company asking for a payment ...
  6. Lloyd's Of London

    A British insurance market where members join hands as syndicates ...
Related Articles
  1. Is Your Insurance Company Going Belly ...
    Home & Auto

    Is Your Insurance Company Going Belly ...

  2. Insure Your Future With A Career As ...
    Home & Auto

    Insure Your Future With A Career As ...

  3. Will Filing An Insurance Claim Raise ...
    Insurance

    Will Filing An Insurance Claim Raise ...

  4. Introduction To The Continuing Claims ...
    Professionals

    Introduction To The Continuing Claims ...

comments powered by Disqus
Hot Definitions
  1. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  2. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  3. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  4. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  5. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  6. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
Trading Center