Claims handling encompasses everything from first notice of loss through closure: coverage analysis, liability and damages investigation, reserve setting, communication with the insured and claimant, defense counsel assignment, and settlement negotiation.
It is governed by the policy, by state unfair claims practices statutes, and by the implied covenant of good faith and fair dealing.
Alternative Names:
Claims Management, Claim Adjusting
Why it Matters?
Claims handling conduct is the evidence in every bad faith case. The file itself, including diary entries, reserve changes, and internal notes, becomes the record on which reasonableness is judged. Defense counsel are participants in that record through their evaluation letters and status reports, which means the quality and timeliness of those communications carry real consequences for the carrier.
Frequently Confused with
Related terms
Frequently asked questions
What claims handling conduct most often supports a bad faith claim?
Is the claim file discoverable?
