Which of these is NOT an Unfair Claims Settlement Practice?

• A. Settling a claim by arbitration
• B. Failing to acknowledge receipt of a claim within a reasonable time
• C. Not attempting to settle claims promptly
• D. Misrepresenting facts during the claims investigation

Answer: (A)

Not an unfair claims settlement practice is about how claims are resolved in a fair, timely, and transparent way. Settling a claim by arbitration isn’t inherently improper; arbitration is a recognized method for resolving disputes and can be provided for in a policy or agreed to by both parties. It doesn’t, by itself, indicate bad faith or unfair handling.

The other items describe clear problems with how claims are managed. Failing to acknowledge receipt of a claim within a reasonable time delays the process and can leave the insured in the dark about where things stand. Not attempting to settle claims promptly violates the expectation of timely handling. Misrepresenting facts during the claims investigation strikes at the heart of fair dealing, undermining trust and misinforming the insured about what the policy covers.