Our next stop as we tour the claims handling guidelines of the 50-states is the First state, Delaware. I have never spent a lot of time in Delaware but I do have a fondness for it. When I was young, I was fortunate enough to have a family home on the Delaware Bay about a mile from the Cape May Ferry. On a clear night, we could see the lights in Lewes, Delaware and I always imagined taking my little sunfish sailboat across the bay to visit (I never did).

Delaware’s regulations set forth the claims handling requirements that insurance carriers must follow in Del. Code Ann. title 18 ch 900 §902-1.2. First, an insurance carrier may not misrepresent pertinent facts or insurance policy provisions relating to coverage at issue.1 A Delaware insurance carrier must acknowledge and respond within 15 working days to communications regarding claims by insureds.2 The carrier must begin a prompt investigation into the loss within 10 working days of receiving the claim.3 The carrier must not deny a claim without conducting an investigation based upon all available information when facts of the loss indicate that such an investigation is necessary to properly determine such a denial of payment.4 The carrier must accept or deny the claim (or provide the reason for the inability to do so) within 30 days after proof of loss statements have been received by the insurer.5

Further, insurance carriers in Delaware must always attempt in good faith to effectuate prompt, fair, and equitable settlement of claims in which liability has become clear and they must not force insureds to file litigation in order to recover insurance proceeds or offer less than a reasonable person would think fair to settle a claim.6 When settling claims, payments must be accompanied by a statement setting forth the coverages under which the claims are being paid.7 They also must not fail to pay a claim under one portion of the policy to influence settlements of other portions of the policy.8 Finally, when requested, the carrier must provide the legal and factual basis for their claims decision.9

It is clear that Delaware has some pretty tight guidelines within which insurance carriers must operate. This is good news for Delaware insureds facing property damage or business losses.

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1 Del. Code Ann. title 18 ch 900 §902-1.2.1.1.
2 Del. Code Ann. title 18 ch 900 §902-1.2.1.2.
3 Del. Code Ann. title 18 ch 900 §902-1.2.1.3.
4 Del. Code Ann. title 18 ch 900 §902-1.2.1.4.
5 Del. Code Ann. title 18 ch 900 §902-1.2.1.5.
6 Del. Code Ann. title 18 ch 900 §902-1.2.1.6, 7 & 8.
7 Del. Code Ann. title 18 ch 900 §902-1.2.1.10.
8 Del. Code Ann. title 18 ch 900 §902-1.2.1.12.
9 Del. Code Ann. title 18 ch 900 §902-1.2.1.13.

  • shirley heflin

    Dear Mr. Trautmann:

    It’s comforting to read that Delaware has regulations in place making insurance companies accountable to their insureds during the claims handling process. One less State to worry about that’s not stuck in the “stone ages” (i.e., not looking out for the Insureds).

    Of course, any State could create additional regulations favoring the insured’s interests as there’s never enough “insured protection” in any State.

    Respectfully,
    SHIRLEY HEFLIN
    Tampa, FL