North Carolina DOI reminds insurers of claims processing delay consequences

North Carolina Insurance Commissioner Mike Causey has issued an advisory bulletin as a reminder of a mandate to promptly handle and settle auto insurance claims.

“The department is seeing an increase in consumer complaints regarding delays in claims processing, including the review of supplemental damage estimates, response times for diminished value claims, and overall communication regarding the status of claims.

“Delays in the handling of claims can lead to financial hardship, emotional distress, and prolonged inconvenience for consumers. Delays in claim resolution should be minimized to ensure that consumers receive the coverage and compensation they are entitled to under their insurance policies.”

Under North Carolina law, prohibited claims practices, among others, are delayed acknowledgment and response to claims, refusing to pay claims without conducting a reasonable investigation, and attempting to settle a claim for less than the amount a reasonable person believes they’re entitled. Such practices can also result in breach of duty violations.

If any actions under the law happen enough to be considered a general business practice, they’re considered unfair methods of competition and unfair and deceptive acts or practices, according to the NCDOI.

“Practices that violate these requirements also erode consumer trust and confidence in the insurance industry,” Causey states in the bulletin.

“Therefore, the department urges all licensed insurers offering automobile insurance in North Carolina to prioritize reasonably prompt handling and settlement of auto insurance claims. Insurers are also encouraged to take necessary measures to address any systemic issues contributing to delays in resolving claims. The department closely monitors insurer practices and will take appropriate enforcement action against any insurer it finds to be in violation of our laws.”

During the Society of Collision Repair Specialists’ April 2023 open board meeting, Causey said there are insurance companies that do a good job of handling and paying claims more quickly than others. He suggested consumers shop around for the best coverage.

“Anything that you bring to the attention of the regulators, if you give it to our office and say, ‘We’ve noticed this, this is the documentation we have,’ we’ll get our folks on it and investigate it and try to get to the bottom of it.”

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Featured image credit: North Carolina Insurance Commissioner Mike Causey speaks during an SCRS open board meeting in April 2023. (Lurah Lowery/Repairer Driven News)

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