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

Failing to Explain a Payment or Denial

When you file an insurance claim, you have specific rights. Insurers must follow strict rules regarding communication. Transparency is legally required throughout the entire claims process.

First, your insurer must provide a clear explanation of benefits. This document is often referred to as an EOB. It serves as a detailed receipt for your filed claim. The EOB must explicitly detail the specific coverage you used.

Furthermore, the company must show how they calculated your payment. The math behind their final decision should never be hidden. The document must list any applied financial deductions clearly. It must also explain any depreciation taken from your payout.

Additionally, policies often contain specific limitations or complex exclusions. Your insurer must state if these factors reduced your payment. They cannot secretly apply policy rules without telling you directly. You deserve to know exactly why your payout was lowered.

Sometimes, an insurance company will completely deny a claim. If this happens, they must provide a formal written explanation. You have the right to request this necessary documentation. Failure to explain denials can violate the law. The insurer must then produce a detailed written basis.

A generic statement is never acceptable for a formal denial. They cannot use vague language to dismiss your damages. They must cite the exact policy language supporting their decision.

If you receive a denial without proper explanation, take note. A lack of proper detail is a serious red flag. In fact, it may be considered a potential legal violation. You may have strong grounds to appeal the decision entirely. You can also file a formal complaint with state regulators. Hold your insurer accountable to these basic communication standards.

Need Legal Help With an Insurance Dispute?

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. Protect yourself from any failure to explain denials by your insurance.

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.