North Carolina Adjuster Practice Exam

Which of the following is considered an Unfair Claims Settlement Practice in North Carolina?

1. Requesting verification of facts without explaining the reason for doing so.

2. Not responding to claims within a 30-day period.

3. Not investigating a claim adequately.

4. Offering a settlement lower than the estimated repair costs.

The correct answer is: Requesting verification of facts without explaining the reason for doing so.

In North Carolina, unfair claims settlement practices are actions by an insurer that do not align with fair and ethical treatment of policyholders during the claims process. Requesting verification of facts without explaining the reason can mislead or confuse a claimant, creating an environment of suspicion and lack of transparency. This lack of communication regarding the rationale behind the request is considered unfair because it may place an undue burden on the claimant and could lead to an unjust denial or delay of a claim. While other actions, such as failing to respond to claims in a timely manner, inadequate investigations, or offering low settlements, can also be viewed as unfair practices, the question specifically highlights the need for clarity in communication. The insurer's failure to adequately explain their actions could be detrimental to the claimant's understanding of the process and is why this action is categorized as an unfair claims settlement practice in North Carolina.