Utah law gives policyholders powerful protection against deceptive, coercive, or bad-faith behavior by insurance companies. Under the Utah Administrative Code—specifically R590-190-9 and R590-190-12—insurers must follow strict standards when adjusting, evaluating, and settling claims.

Here is part 5 of 10 major practices that insurers in Utah are legally prohibited from using, along with expanded explanations to help you recognize violations.

Paying Employees Based on Claim Denials

Utah forbids insurers from rewarding staff for denying claims. They also cannot reward them for reducing claim payouts. Furthermore, delaying or obstructing settlements must not be incentivized. These incentives create clear conflicts of interest. They also strongly encourage unfair treatment of policyholders.

For example, an adjuster might be offered a bonus. She earns this specifically for denying ten claims monthly. Consequently, she unfairly denies as many claims as possible. Another example involves tying commissions to low settlements. An employee might get perks for routinely underpaying claims. Managers could also base promotions on stalling settlement negotiations. This wrongly pressures staff to intentionally delay legitimate investigations.

Utah’s Unfair Claim Settlement Practices Act explicitly targets this. The law strictly prohibits misrepresenting facts to avoid paying. Insurers must acknowledge and investigate all claims very promptly. Good faith is legally required for every single settlement. State regulators can impose penalties for any intentional violations. Claims must always be evaluated purely on their merit. An insurer’s goal must be honoring valid policy contracts. Compensation must promote fair, prompt, and honest service instead.

Need Legal Help With an Insurance Dispute?

Contact Attorney David Head

If your insurance company is delaying, denying, or undervaluing your claim, Attorney David Head can help you stand up to unfair practices and fight for the benefits you deserve.

Whether your dispute involves auto, homeowners, health, life, disability, or commercial insurance, David has extensive experience navigating complex insurance litigation and negotiating with carriers who are acting in bad faith.

📞 Phone: 801-691-7511

David Head has spent years holding insurers accountable, challenging unlawful denials, and protecting Utah consumers and businesses from bad faith claim practices.