On September 3rd, Anthony DiUlio, partner at Wheeler, DiUlio & Barnabei, hosted a lunch & learn webinar, Unfair Claims Practices Law: How Can Your State’s Statutes Help You Resolve Claims.
Every state has laws or statutes that regulate what insurance companies can and cannot do. Despite the states enforcing compliance with these “bare bone” laws, many adjusters actually do not know the regulations of carriers. In this webinar, DiUlio discussed these laws, specifically regarding the Pennsylvania and New Jersey areas, how to use statutes to move a claim, and what to do when the carrier does not comply with the statutes.
Here’s a recap of some of the information from the lunch & learn webinar:
Insurance Statutes By State
Unfair Insurance Practices: New Jersey Statute
The New Jersey version of the Unfair Insurance Practices law states the carriers must provide code to employees, and they have the responsibility to ensure employees know what it says. Letters must be clear, easy to read, and understandable. However, this law does not apply to commercial policies over $10,000 in premiums.
Key time restrictions and notes with this New Jersey law include the following:
- The investigation must begin within 10 days of receipt of the claim.
- If the carrier wants to inspect, it must be within 10 working days from the claim notification unless the client refuses to allow the inspection in that time.
- Claims must be determined within 30 days of receipt of a properly executed proof of loss unless clear justification exists. Otherwise, there must be a written notice within those 30 days stating why additional time is needed, meaning the individual making the claim must understand and articulate why the investigation is ongoing. Updates are required every 45 days for extensions.
- All amounts agreed to must be paid within 10 days of the agreement.
- If the carrier has an estimate lower than your contractor, they need to supply a contractor who would make the repairs in accordance with generally accepted standards for safe and proper repairs.
In addition, denials for claims must be written, have specific reference to the language as well as a statement of fact which applies to the policy, and include a reference to the policyholder’s right to sue.
Unfair Insurance Practices: Pennsylvania Statute
There are many similarities between the New Jersey and Pennsylvania statutes for Unfair Insurance Practices. A few key highlights of the PA statute include:
- The insurer cannot reduce coverage through a renewal of a policy
- The carrier must maintain a record of all complaints for the past 4 years
- The insurer cannot make, publish, or issue any estimate or statement that is misleading as to the reserves on a file
Pennsylvania law also lists reasons to cancel or non-renew involving, but not limited to, material misrepresentation, fraud, omissions or concealment of material facts, and failure to pay a premium. In addition, the PA statute also provides ways for cancellations or non-renewals. To do this, the date of cancellation must be at least 30 days out and a form of cancellation or non-renewal with specific reasons as to why must be approved by the commissioner.
Overlaps in PA & NJ Statutes
While each state has its own specific statutes relating to unfair claims, there are overlapping ideas and concepts in these policies, particularly examining Pennsylvania and New Jersey statutes. For starters, the insurer must disclose all pertinent benefits, coverages, and/or provisions of the policy and must provide the holder with the policy in both PA and NJ. All benefits must be available and not concealed.
Also, when making a claim, the insurer cannot make proof of loss timing deadlines unless it is stated in the policy. The insurer cannot request a release that extends beyond the subject matter that gave rise to the claim payment no use partial checks that use language that could release the carrier from future payments. In other words, the insurer cannot use the line “full and final payment” in the memo.
Further, the insurer has 10 working days to acknowledge a claim was put in and respond with an appropriate, substantive reply within those 10 days. If the claim is still being negotiated, the carrier must send notice 60 days before the suit limitation period explaining that there is a limit on the time to sue in NJ, and that timeframe is shortened to 30 days in PA.
Insurance companies are in violation if they inform insureds they will just appeal arbitrary awards to compel agreeing to lower settlements. Insurers also cannot delay a claim by requiring a preliminary claim report and then requiring proof of loss with substantially the same information. Finally, no insurer shall deny a claim for failure to exhibit the property without proof of demand and unfounded refusal by a claimant to do so. Thus, if the carrier did not ask to see the property, and the insured said no you cannot, the insurer cannot deny a claim because there was a failure to see the damaged property.
These are just a few of the laws presented in the statutes. Please contact our office for assistance and watch our webinar to learn about more of the state-specific laws.
Moving Forward:
The first thing you should do is go into your state’s statutes to fully understand what insurers must be doing. Second, create a claim calendar for when you submit the claim and all following date restrictions outlined in the statutes. Third, put the carriers on notice of violations, preferably in a written format such as an email. Fourth, use the violations to get what you need to resolve the claim.
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Interested in learning more? Register for our next lunch & learn webinar.
