Unfair Claims Practice

Published: | Updated: March 31, 2018

Definition - What does Unfair Claims Practice mean?

An unfair claims practice occurs when an insurance company attempts to reduce the size of, or otherwise alter, a claim in an illegitimate manner. Unfair claims practice is illegal in many places. If a policyholder believes he or she is experiencing unfair claims practice, he or she can dispute the claim with the insurance company, or even seek legal action if necessary.

Insuranceopedia explains Unfair Claims Practice

Insurance policies are often very complicated, so perpetrators of unfair claims practices may take advantage of the fact that the policyholder probably did not study the entire policy. An insurer may, for instance, attempt to reduce the size of a payout based on ambiguous and convoluted information within the policy that is not legitimate. Many people choose to sue insurers who they believe are participating in unfair claims practices,

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