What is a common practice considered an unfair settlement?

Delaying payment indefinitely is a common practice that falls under unfair settlement practices. Insurance companies are obligated to investigate claims reasonably and make timely payments as per the terms outlined in the policy. When a claim is delayed without a legitimate reason, it can harm the policyholder financially and emotionally, leading to anger and frustration.

This behavior not only violates the ethical obligations insurers have to their clients but may also contravene state insurance regulations that require fair and prompt handling of claims. Policies are designed to provide assurance and financial backup, so unduly holding up a claim can be seen as taking advantage of the policyholder's situation.

In contrast, actions like paying claims promptly, explaining policy terms, and offering full benefits as stated in the contract are considered fair practices that fulfill the insurer's duty to their clients. These actions help cultivate trust and maintain positive relationships with policyholders.