As promised in my recent post regarding the Gatlinburg fires, today we are looking at the claims handling guidelines provided by the Tennessee code. The Tennessee code has some general requirements that require insurance carriers to develop standards and practices for the prompt and proper handling of claims in the Unfair Claims Settlement Practices Act. Tenn. Code Ann. § 56-8-105.
Specifically, a Tennessee insurance carrier must acknowledge and act upon communications with respect to claims reasonably promptly. Tenn. Code Ann. § 56-8-105(2). They must also provide all claims forms and instructions for their use in response to a request within 15 days from the date of the request. Tenn. Code Ann. § 56-8-105(13). The insurance carrier must affirm or deny coverage of the claims within a reasonable time after the claimant provides a proof of loss. Tenn. Code Ann. § 56-8-105(7). The carrier must settle claims promptly after liability has become reasonably clear. Tenn. Code Ann. § 56-8-105(4). When a claim is denied, or a claim is partially paid as a result of a compromise settlement, the insurance carrier must also promptly provide a reasonable and accurate explanation for the denial or the offer of compromise. Tenn. Code Ann. § 56-8-105(12). Interestingly, the Tennessee code also prohibits and insurer from requesting additional backup to a proof of loss where the information requested would be duplicative to what was contained within the proof of loss. Tenn. Code Ann. § 56-8-105(11). Also, while it probably goes without saying, Tennessee considers it an unfair claims practice to force a policyholder to sue to recover their insurance benefits. Tenn. Code Ann. § 56-8-105(5).
Unfortunately, the Unfair Claims Settlement Practices Act does not carry with it a private right of action for violations, however that does not mean it is irrelevant. Policyholders and their representatives should know this law and hold carriers to it, pointing out where ever they fail. This will help in ensuing litigation.
As frequent readers of the blog know, I try to close my posts with a video or photo related to the topic. For this blog, I agonozied over what to pick for Tennessee because of the richness of the state and the sheer volume of music written in or about it. So I chose two: