Alaska, Arizona and other states have adopted the Uniform Unfair Claims Settlement law, which allows 1st party (insured) and 3rd party (not the insurer's client) claims for failure to properly handle claims by:

1. Misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue.

2. Failing to acknowledge and act reasonably and promptly upon communications with respect to claims arising under an insurance policy.

3. Failing to adopt and implement reasonable standards for the prompt investigation of claims arising under an insurance policy.

4. Refusing to pay claims without conducting a reasonable investigation based upon all available information.

5. Failing to affirm or deny coverage of claims within a reasonable time after proof of loss statements have been completed.

6. Not attempting in good faith to effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear.

7. Compelling insureds to institute litigation to recover amounts due under an insurance policy by offering substantially less than the amounts ultimately recovered in actions brought by the insureds.

8. Attempting to settle a claim for less than the amount to which a reasonable person would have believed he was entitled by reference to written or printed advertising material accompanying or made part of an application.

9. Attempting to settle claims on the basis of an application which was altered without notice to, or knowledge or consent of, the insured.

10. Making claims payments to insureds or beneficiaries not accompanied by a statement setting forth the coverage under which the payments are being made.

11. Making known to insureds or claimants a policy of appealing from arbitration awards in favor of insureds or claimants for the purpose of compelling them to accept settlements or compromises less than the amount awarded in arbitration.

12. Delaying the investigation or payment of claims by requiring an insured, a claimant or the physician of either to submit a preliminary claim report and then requiring the subsequent submission of formal proof of loss forms, both of which submissions contain substantially the same information.

13. Failing to promptly settle claims if liability has become reasonably clear under one portion of the insurance policy coverage in order to influence settlements under other portions of the insurance policy coverage.

14. Failing to promptly provide a reasonable explanation of the basis in the insurance policy relative to the facts or applicable law for denial of a claim or for the offer of a compromise settlement.

15. Attempting to settle claims for the replacement of any nonmechanical sheet metal or plastic part which generally constitutes the exterior of a motor vehicle, including inner and outer panels, with an aftermarket crash part which is not made by or for the manufacturer of an insured's motor vehicle.

Also, the laws contain provisions to ban employment practices by carriers to engage in unfair claims practices:

FORCE OR ENCOURAGE CLAIMS PERSONNEL TO CHALLENGE AND RESIST REASONABLE CLAIMS OF INSUREDS AND CLAIMANTS IN ORDER TO OBTAIN AN INCREASE IN SALARY OR AN ADVANCE IN POSITION FROM THE PERSONNEL'S EMPLOYER.


REFUSE TO PAY CLAIMS OR REDUCE THE AMOUNT PAID ON CLAIMS BY RELYING ON INJURY CAUSATION DEFENSES THAT ARE NOT SHOWN TO BE WIDELY ACCEPTED BY THE SCIENTIFIC COMMUNITY.


MAKE BIASED OR UNFAIR DECISIONS OR USE A CLAIMS REVIEW ORGANIZATION, ADJUSTER OR PHYSICIAN THAT MAKES BIASED OR UNFAIR DECISIONS.

California has its own laws concerning unfair claims practices at Cal Civ Code Section 2695.