What might be considered an unfair claims settlement practice?

Maryland’s Unfair Claim Settlement Practices standards.

Maryland law requires insurers to:

Promptly investigate claims

Act in good faith

Attempt fair and equitable settlements when liability is clear

Analyze each option carefully.

A. Compromise settlements when facts are in question

This is a legitimate and encouraged claims practice.

B. Denying coverage after timely investigation

Permissible if the denial is based on policy terms.

C. Failing to promptly investigate and settle legitimate claims

This is a classic unfair claims settlement practice under Maryland law.

D. Compelling litigation when a real dispute exists

Allowed when coverage is genuinely disputed.

Good-faith obligation.

Delays or failures to settle valid claims undermine the insurer’s duty of good faith and fair dealing.

Regulatory consequences.

Such conduct may lead to:

Administrative penalties

Market conduct actions

Civil bad-faith exposure

Conclusion.

Failure to promptly investigate and settle valid claims is an unfair claims settlement practice.