The Maryland Insurance Administration and Unfair Claims Practices

By Jeffrey J. Downey, Attorney representing clients in Virginia, Maryland and the District of Columbia.
Phone 703-564-7318, email jdowney@jeffdowney.com On the web at www.jeffdowney.com.

Dealing with insurance companies in auto accident or personal injury cases can be challenging.  When insurance companies fail to honor their coverage obligations or engage in unfair practices, it can be difficult to secure legal counsel.   Without insurance coverage, consumers could have to retain expensive coverage counsel, who generally charge by the hour.

In Maryland there is an independent agency, the Maryland Insurance Administration, headed by Maryland Insurance Commissioner, that investigates unfair claims practices. They have authority to investigate cases, and even take action on your behalf.

In a recent case, an insurance company denied coverage unfairly for my client.  I had limited experience with the commission, but they investigated the case and as a result, the insurance company changed its coverage denial.  The chain of events starting with the investigation which prompted the insurance company’s change of heart, eventually saving my client the time and expense of pursuing an expensive lawsuit against the defendant’s insurance company just to determine insurance coverage.

The commission can investigate claims of unfair claims practices, which are set forth in Title 26 of the Unfair Trade Practices Act, Section 27-304.  Under this act, violations include

(1) misrepresent pertinent facts or policy provisions that relate to the claim or coverage at issue;

(2) failing to acknowledge and act with reasonable promptness on communications about claims that arise under policies;

(3) failing to adopt and implement reasonable standards for the prompt investigation of claims that arise under policies;

(4) refusing to pay a claim without conducting a reasonable investigation based on 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) failing to make a prompt, fair, and equitable good faith attempt, to settle claims for which liability has become reasonably clear;

(7) compel insureds to institute litigation to recover amounts due under policies by offering substantially less than the amounts ultimately recovered in actions brought by the insureds;

(8) attempt to settle a claim for less than the amount to which a reasonable person would expect to be entitled after studying written or printed advertising material accompanying, or made part of, an application;

(9) attempt to settle a claim based on an application that is altered without notice to, or the knowledge or consent of, the insured;

(10) fail to include with each claim paid to an insured or beneficiary a statement of the coverage under which the payment is being made;

(11) make known to insureds or claimants a policy of appealing from arbitration awards in order to compel insureds or claimants to accept a settlement or compromise less than the amount awarded in arbitration;

(12) delay an investigation or payment of a claim by requiring a claimant or a claimant’s licensed health care provider to submit a preliminary claim report and subsequently to submit formal proof of loss forms that contain substantially the same information;

(13) fail to settle a claim promptly whenever liability is reasonably clear under one part of a policy, in order to influence settlements under other parts of the policy;

(14) fail to provide promptly a reasonable explanation of the basis for denial of a claim or the offer of a compromise settlement;

(15) refuse to pay a claim for an arbitrary or capricious reason based on all available information;

(16) fail to meet the requirements of Title 15, Subtitle 10B of this article for preauthorization for a health care service;

(17) fail to comply with the provisions of Title 15, Subtitle 10A of this article; or

(18) fail to act in good faith, as defined under § 27-1001 of this title, in settling a first-party claim under a policy of property and casualty insurance.

For more information about unfair claims practices click here.

If you have been involved in a personal injury matter in which an insurance company has treated your unfairly, consider filing a complaint with the insurance commission.

Maryland Insurance Administration
Attn:  Consumer Complaint Investigation
200 St Paul Place, Suite 2700
Baltimore, MD  21202

Phone: 410-468-2000 or 1-800-492-6116
TTY: 1-800-735-2258
Fax: 410-468-2334 or 410-468-2307 (Property and Casualty)
410-468-2270 or 410-468-2260 (Life and Health/Appeals and Grievance)

If you have questions about the process or want to figure out the most compelling way to present your complaint, feel free to contact the Law Office of Jeffrey J. Downey for additional information.

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