Know Your Rights Under the Unfair Practices Act and the Fair Claims Settlement Practices Regulations

Insurance Code section 790 and several following sections constitute the Unfair Practices Act. More particularly, Section 790.03(h) specifically lists a number of prohibited unfair claims settlement practices. The Unfair Practices Act requires an insurer's response to a notice of claim to include a copy of Section 790.03 and a written notice that, in addition to Section 790.03, Fair Claims Settlement Practices Regulations govern how insurance claims must be processed in this state. These regulations are found in Chapter 5 of Title 10 of the California Code of Regulations, and commence at Section 2695.1. You may request a copy of the regulations from the insurer, but an insurer is only required to provide you with a portion of the regulations. The full text of the regulations is available at the California Department of Insurance website. The regulations specify time deadlines within which insurers must acknowledge, evaluate, make and communicate decisions on claims, and pay claims. They as well restrict the information that can be demanded from a claimant to information that is reasonably necessary in making a claim determination. The regulations provide that a denial of a claim must be in writing, with specified reasons for the denial, and must include a notification that if the claimant believes the claim to have been wrongfully denied, the matter may be reviewed by the Department of Insurance.

Talk to the Claims Manager

Do not hesitate to contact the claims manager to explain your concerns about the claims settlement if you do not agree with the settlement offer and have given the claims adjuster the opportunity to respond to your questions. Provide copies of supporting documentsto the manager. Also, send a letter and copies of documents to the claims executive at the insurance company's headquarters, whose address is usually found on the first or last page of the policy.

Contact the California Department of Insurance

The Consumer Communications Bureau (CCB) is responsible for educating thousands of callers about the Department of Insurance's regulatory responsibilities and for providing information regarding insurance matters. The CCB has a toll-free Hotline which is staffed by over 40 officers with the expertise to handle a variety of insurance issues and complaints. After listening to and discussing a consumer's concerns over the phone, a Hotline officer may decide to send the consumer a Request for Assistance (RFA) form to be completed and returned to the Department. The RFA provides the necessary information to open a claims investigation, which will be handled by officers in the Claims Services Bureau. The primary function of the Claims Services Bureau is to investigate complaints and answer questions related to the handling of claims. This Bureau determines if insurance companies are fulfilling their lawful obligations to policyholders that file claims.

Consult an Attorney

If you hire an attorney, provide him/her with a copy of your insurance policy and all other relevant documents. Get your attorney's fee structure in writing before you give him/her your business. You will no longer talk directly with the insurance company, but can remain current on the progress of your claim by insisting that you receive copies of all correspondence your case from your attorney. The attorney must have your approval before committing to any settlement. You can find out more about insurance claim litigation on our Insurance Bad Faith page.

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