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 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.1
Specifically, a Tennessee insurance carrier must acknowledge and act upon communications regarding claims reasonably promptly.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.3 The insurance carrier must affirm or deny coverage of the claims within a reasonable time after the claimant provides a proof of loss.4 The carrier must settle claims promptly after liability has become reasonably clear.5 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.6 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.7 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.8
Unfortunately, the Unfair Claims Settlement Practices Act does not have 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 should there be 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 agonized 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:
1 Tenn. Code Ann. § 56-8-105.
2 Tenn. Code Ann. § 56-8-105(2).
3 Tenn. Code Ann. § 56-8-105(13).
4 Tenn. Code Ann. § 56-8-105(7).
5 Tenn. Code Ann. § 56-8-105(4).
6 Tenn. Code Ann. § 56-8-105(12).
7 Tenn. Code Ann. § 56-8-105(11).
8 Tenn. Code Ann. § 56-8-105(5).