Claims Handling Practices

1 24-B-07 To: All Licensed Property/Liability Insurance Companies All AdjusƟng Firms From: Consumer Services Division Date: May 29, 2024 Subject: Claims Handling PracƟces The North Carolina Department of Insurance issues this advisory bulleƟn to emphasize the importance of promptly handling and seƩling automobile insurance claims in accordance with state statutes and rules. The Department is seeing an increase in consumer complaints regarding delays in claims processing, including the review of supplemental damage esƟmates, response Ɵmes for diminished value claims, and overall communicaƟon regarding the status of claims. Delays in the handling of claims can lead to financial hardship, emoƟonal distress, and prolonged inconvenience for consumers. Delays in claim resoluƟon should be minimized to ensure that consumers receive the coverage and compensaƟon they are enƟtled to under their insurance policies. General Statute § 58-63-15 idenƟfies claims pracƟces that if commiƩed with such frequency as to indicate a general business pracƟce, are unfair methods of compeƟƟon and unfair and decepƟve acts or pracƟces. These claims pracƟces include:  Failing to acknowledge and act reasonably promptly upon communicaƟons with respect to claims arising under insurance policies.  Failing to adopt and implement reasonable standards for the prompt invesƟgaƟon of claims arising under insurance policies.  Refusing to pay claims without conducƟng a reasonable invesƟgaƟon based on all of the informaƟon available.  Not aƩempƟng in good faith to effectuate prompt, fair and equitable seƩlements of claims in which liability has become reasonably clear.  AƩempƟng to seƩle a claim for less than the amount to which a reasonable person would have believed he or she was enƟtled. 2 Chapter 4 of Title 11 of the North Carolina AdministraƟve Code sets out further pracƟces related to motor vehicle damage claims that amount to prima facie violaƟons of G.S. § 58-63-15(11). PracƟces that violate these requirements also erode consumer trust and confidence in the insurance industry. Therefore, the Department urges all licensed insurers offering automobile insurance in North Carolina to prioriƟze reasonably prompt handling and seƩlement of auto insurance claims. Insurers are also encouraged to take necessary measures to address any systemic issues contribuƟng to delays in resolving claims. The Department closely monitors insurer pracƟces and will take appropriate enforcement acƟon against any insurer it finds to be in violaƟon of our laws. The Department appreciates insurers’ immediate aƩenƟon to this issue. Please refer any quesƟons regarding this bulleƟn to the Department’s Consumer Services Division at CSD@ncdoi.gov or 855-408-1212.