Unfair Insurance Practices (ch. 176D)
Our civil litigation attorneys are experienced with both pursuing and defending claims under the Unfair Methods of Competition and Unfair and Deceptive Acts and Practices in the Business of Insurance Act (Massachusetts General Laws, chapter 176D). The statute provides robust protections for both insureds and third-party claimants. Section 3 of the statute identifies specific acts and practices by insurers which are considered unfair or deceptive, including:
- misrepresentations about the benefits, terms, or conditions of an insurance policy;
- false or misleading advertising;
- unfair discrimination; and
- unfair settlement of claims.
For claimants, we hold insurers accountable for wrongful denials of coverage, unreasonable claim settlement delays, and other violations of the statute. For insurers, we provide coverage recommendations and consulting on best practices in accordance with the statute. A victim of an insurer’s willful or knowing violation of chapter 176D can be awarded double or triple damages, plus his or her attorney’s fees incurred in pursuing the claim. Section 3(9) of the statute lists the following specific acts or omissions by insurers, which are considered unfair claims settlement practices:
- Misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue;
- Failing to acknowledge and act reasonably promptly upon communications with respect to claims arising under insurance policies;
- Failing to adopt and implement reasonable standards for the prompt investigation of claims arising under insurance policies;
- Refusing to pay claims without conducting a reasonable investigation based upon all available information;
- Failing to affirm or deny coverage of claims within a reasonable time after proof of loss statements have been completed;
- Failing to effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear;
- 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 such insureds;
- 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;
- Attempting to settle claims on the basis of an application which was altered without notice to, or knowledge or consent of the insured;
- Making claims payments to insured or beneficiaries not accompanied by a statement setting forth the coverage under which payments are being made;
- Making known to insured or claimants a policy of appealing from arbitration awards in favor of insureds or claimants for the purpose of compelling them to accept settlements of compromises less than the amount awarded in arbitration;
- Delaying the investigation or payment of claims by requiring that an insured or claimant, or the physician of either, 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;
- Failing to settle claims promptly, where 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; or
- Failing to provide promptly a reasonable explanation of the basis in the insurance policy in relation to the facts or applicable law for denial of a claim or for the offer of a compromise settlement.
Most chapter 176D cases concern one or more of these practices which have been utilized with respect to a particular claim.
Litigating a chapter 176D claim is a complex process. Our attorneys know the relevant case law, discovery tools, and litigation strategy necessary to obtain a favorable result. If you've been adversely affected by an insurer's unfair or deceptive acts, please contact our office for a consultation.
