The Arizona Legislature has enacted laws governing and regulating insurance carriers. It is Title 20 in the Arizona Revised Statutes. https://www.azleg.gov/ARStitle/ This is a statute that I use frequently in assisting my clients is called the “Unfair claim settlement practices” statute and is codified as A.R.S. §20-461.
This statute or law makes certain unfair claims practices that have been implemented by insurance carriers through the years illegal. Insurance carriers are typically large companies with extensive resources, lawyers, and other insurance and claims professionals. Many times insureds are individuals, families, or small businesses that do not know the law, claims practices and requirements, or the details of their insurance policy. The statute was enacted to protect consumers from overly aggressive or predatory tactics employed by insurance carriers with the goal of paying out less money in claims. The statute prohibits certain specific things that insurance carriers can do to make liquidating a claim or getting paid for a loss more expensive, more difficult than it should be, or impractical, or to require litigation in order to liquidate the claim.
Insurance carriers can and often do delay, deny, and slow things down to keep consumers and my clients from getting paid for a loss. I frequently use this statute to keep claims moving and produce great results for my clients.
If a consumer finds that an insurance carrier is violating this statute, they can register a complaint with the Arizona Department of Insurance. It is important to document correspondence in writing and you should give the insurance carrier the opportunity to respond and fairly adjust the claim. You can report a violation to the Arizona Department of Insurance by e-mail or mail. More information can be found at: https://insurance.az.gov/ The Department of Insurance has some teeth and may fine or prohibit an insurance carrier from doing business in Arizona. The website also has some great information on insurance laws, insurance carrier contact information, and insurance carriers that may do business in Arizona.
Here are some of the things that A.R.S. §20-461 prohibits representatives of an insurance carrier from doing:
Misrepresenting pertinent facts or insurance policy provisions
Failing to acknowledge and act promptly regarding claims
Failing to reasonably investigate claims
Refusing to pay claims without investigating
Failing to confirm or deny coverage in a reasonable time
Failure to effectuate prompt, fair, and equitable settlements where liability has become reasonably clear
Compelling insureds to institute litigation to recover amounts due under a policy by offering less than would be recovered
Attempting to settle a claim for less than a reasonable person would believe it is valued due to advertisement
Making insureds aware of litigation results for the purpose of having them accept offers of compromise
Failure to reasonably settle claims where liability has become clear
Failure to provide a reasonable explanation for the basis of a denial
Denying liability for an automobile collision without having sufficient information
This statute protects consumers and was enacted because insurance carriers use these unfair practices to pay out less money for claims. It is just as important to present a claim to an insurance carrier in a manner that they will be able to properly evaluate the claim as it is to know the law that insurance carriers are required to follow and what they are not required to do. Likewise, it is just as important to document the claim and correspondence as it is to know when an insurance carrier is breaking the law by employing an illegal unfair claim practice.
If you are injured in a car accident, you should always talk to an experienced injury lawyer. If you have an insurance claim, it is important to know the law, properly document and prove your claim, present the claim in a manner that the insurance carrier will be able to properly evaluate the claim, support your claim, and be aware of the resources that can help you to resolve your claim. The best resource is an experienced lawyer in your corner to properly advise and fight for you!
