Which statement about good-faith claim handling is true?

Which statement about good-faith claim handling is true?

• A. It allows the insurer to delay settlements without consequence
• B. It permits inappropriate withholding of information
• C. It requires fair dealing, prompt investigation, and clear communication
• D. It permits denial without investigation

Answer: (C)

Good-faith claim handling centers on the insurer’s duty to treat the claimant fairly throughout the claims process. This means dealing honestly, investigating claims promptly and thoroughly, and communicating clearly about what is found, what the coverage details are, and how decisions are made. When an insurer follows these practices, it protects the insured and supports decisions based on policy language and facts, reducing the risk of bad-faith disputes. So the statement that describes fair dealing, prompt investigation, and clear communication best reflects good-faith claim handling. Delays, withholding information, or denying a claim without investigation would violate this duty and are not characteristic of good-faith handling.

Good-faith claim handling centers on the insurer’s duty to treat the claimant fairly throughout the claims process. This means dealing honestly, investigating claims promptly and thoroughly, and communicating clearly about what is found, what the coverage details are, and how decisions are made. When an insurer follows these practices, it protects the insured and supports decisions based on policy language and facts, reducing the risk of bad-faith disputes. So the statement that describes fair dealing, prompt investigation, and clear communication best reflects good-faith claim handling. Delays, withholding information, or denying a claim without investigation would violate this duty and are not characteristic of good-faith handling.