Which statement about bad-faith laws in insurance claims is true?

Which statement about bad-faith laws in insurance claims is true?

• A. Bad-faith laws are uniform nationwide
• B. They apply only to life insurance
• C. They only apply to property claims
• D. Claim representatives must be familiar with bad-faith laws in jurisdictions in which they handle claims.

Answer: (D)

Bad-faith laws set the standards for how insurers must handle claims, and the specifics of those standards and remedies vary by state. Because the rules differ from one jurisdiction to another, claim representatives must know the bad-faith standards in the states where they handle claims. That makes the statement about needing familiarity with those laws in each jurisdiction the true one. It's not a uniform nationwide set of rules, and these laws apply across lines beyond just life or just property, so the other options don’t fit.

Bad-faith laws set the standards for how insurers must handle claims, and the specifics of those standards and remedies vary by state. Because the rules differ from one jurisdiction to another, claim representatives must know the bad-faith standards in the states where they handle claims. That makes the statement about needing familiarity with those laws in each jurisdiction the true one. It's not a uniform nationwide set of rules, and these laws apply across lines beyond just life or just property, so the other options don’t fit.