Bad Faith: The basic rules of the road every insurance company must follow when adjusting an insurance claim in Oklahoma.

INSURANCE RULES OF THE ROAD

Every insurance company adjusting a first party insurance claim in Oklahoma must follow the following rules of the road.

 

  1. Insurer must treat its policyholder’s interests with equal regard as it does its own interests.  This is NOT an adversarial or competitive process.

        National Mutual Casualty Co. v. Britt, 200 P.2d 407 (Okla. 1949).

        Newport v. USAA, 11 P.3d 190 (Okla. 2000).

      *The Golden Rule*

 

  1. Insurer should assist the policyholder with the claim.

      Christian v. American Home Assurance Co., 577 P.2d 899 (Okla. 1977).

 

  1. Insurer must disclose to its insured ALL benefits, coverages and time limits that may apply to the claim.

            UCSPA (36 O.S. § 1250.5(1)) 

 

  1. Insurer must conduct a full, fair and prompt investigation of the claim.

            Egan v. Mutual of Omaha Insurance Co., 24 Cal.3d 809, 620 P.2d 141 (1979).

               Buzzard v. Farmers Insurance Co. Inc., 824 P.2d 1105 (Okla. 1991).

               Damaj v. Farmers Ins. Co. Inc., 132 F.3d 42 (10th Cir. 1997).

               UCSPA (36 O.S. § 1250.5(3)) 

               UCSPA (36 O.S. § 1250.7(C))

              

  1. Insurer must fully, fairly and promptly evaluate and adjust the claim.

      Buzzard v. Farmers Insurance Co. Inc., 824 P.2d 1105 (Okla. 1991).

        McCorkle v. Great Atlantic Ins. Co., 637 P.2d 583 (Okla. 1981).

        Gary v. American Cas. Co. of Reading, 753 F.Supp 1547 (W.D. Okla. 1990).

               UCSPA (36 O.S. § 1250.5(4))

 

  1. Insurer may not deny a claim or any part of a claim based upon insufficient information, speculation or biased information.

            McCoy v. Oklahoma Farm Bureau Mutual Ins. Co., 841 P.2d 568 (Okla. 1992).

               Massey v. Farmers Ins. Group, 837 P.2d 880 (Okla. 1992).

 

  1. If there is a full or partial claim denial, the insurer must give a written explanation, pointing to facts and policy provisions supporting the denial.

            UCSPA (36 O.S. § 1250.7(A)) 

 

  1. Insurer may not misrepresent facts or policy provisions.

      Christian v. American Home Assurance Co., 577 P.2d 899 (Okla. 1977).

        UCSPA (36 O.S. § 1250.5(2))

        *The Ten Commandments* 

 

  1. Insurer may not make settlement offers less than the insurer’s evaluation of the claim.

      Newport v. USAA, 11 P.3d 190 (Okla. 2000).

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