A bad faith claim practice is what happens when an insurer tries to delay, avoid or reduce the amount of a claim that must be paid to an insured person.
Insurers who do this are trying to cut costs or delay payments to insured persons and often resort to illegal practices.
Many states have enacted unfair claims settlement laws to protect insured persons from insurers’ misconduct in the claims settlement process.
Unfair Claims Settlement Practices Acts (UCSPA) are enforced by individual states, not the federal government, and vary from state to state.