Good Faith Claims, Bad Faith Claims: What Adjusters Should Know

Overview

Insurance is designed to protect policyholders by paying claims for losses that insurance policies cover. This is what the policyholders expect, and this is what insurers generally deliver. However, claims are not always paid or paid promptly. Some are denied because they are not covered. Others are delayed because it takes time to complete a claim investigation. And some are not paid because they were mishandled by an insurance adjuster who may have been negligent, incompetent, or intentionally malicious. Sometimes, claims are improperly handled because an adjuster was following a flawed company policy. Sometimes, the adjuster simply made a mistake.

A claim that is allegedly mishandled for any reason may lead to a bad faith suit by the insured against the insurance company and the adjuster who handled the claim. An insurance company that loses a bad faith suit is often obligated not only to pay the underlying claim but also to pay additional damages to the insured who was wronged. Bad faith claims often involve exemplary or punitive damages in amounts much greater than the original claim, sometimes involving millions of dollars more.

It obviously behooves claims adjusters to recognize the nature of bad faith suits and avoid actions that might lead to bad faith claims. This course is designed to help adjusters meet that objective.

Learning Objectives

Upon completion of this course, you will be able to:

  • recognize the manner in which bad faith concepts developed
  • identify effects of bad faith actions against insurers
  • recognize the impact of the NAIC Unfair Claims Settlement Practices Act and Model Regulation on bad faith actions against insurers
  • identify steps an adjuster can take during all phases of the claims adjustment process to minimize the likelihood of bad faith actions

Designed For

P/C producers, independent adjusters, public adjusters
International Risk Management Institute, Inc. (IRMI) is the premier provider of risk and insurance continuing education and reference publications, and is considered the ultimate authority by leading insurance practitioners. Written by industry experts, IRMI courses provide the most up-to-date, practical and reliable information possible.
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