Claim Handling Requirements by State – Utah

Continuing our tour through state-by-state claim handling guidelines, we explore the requirements for the State of Utah.

I recently escaped from the Sunshine State (Florida) and visited the State of Utah for the first time. I was amazed by its mountains and had lots of fun with the snow. Still I could not avoid but thinking what would be the process and guidelines for claim handling in the Beehive State.

In the State of Utah, property insurance coverage may not be less than 100% of the full replacement cost, which is great because it includes everything whether it was part of the original construction or any remodel or later alteration.¹ This does not apply to condominium associations which are not required to obtain property insurance for a loss to a dwelling that is not physically attached to another dwelling or to a common area structure.² It would also not apply unless declared in the policy for fixtures, improvements, or betterments in a commercial lot or limited common areas appurtenant to a commercial lot in a mixture-use-project.³

The handling of claims should initiate with the acknowledge of notification of a claim within 15 days after receipt to the first or third-party claimant.⁴ Under Utah’s Administrative Code, failure to pay claims within 30 days of properly executed proof of loss when liability is reasonably clear under one coverage in order to influence settlements under other portions of the insurance policy coverage or under other policies of insurance will be considered as an “unfair method, deceptive act and practice” on behalf of the insurance company.⁵ On the other hand, if the investigation remains incomplete by the end of this period, then the insurer shall, within 45 days after sending the initial notification and within every 45 days thereafter, shall send to the first party claimant a letter setting forth the reasons additional time is needed for the investigation, unless the first party claimant is represented by legal counsel or public adjuster.⁶ The insured will only be responsible for the deductible for replacement cost value and the actual cash value basis will be the replacement cost of property at the time of the loss less depreciation.⁷

Utah’s “Unfair Property, Liability and Title Claims Settlement Practices Rules” have additional in-detail standards requirements for fair and equitable settlement claims. It is very important that all insureds comply with the policy conditions and the insurer’s reasonable requirements. It is also important to follow these guidelines and be sure that the insurer is providing a substantive response whenever one has been requested and within the time periods.
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¹ U.C.A. 57-8a-405(2), Property Insurance.
² U.C.A. 57-8a-405(4), Property Insurance.
³ U.C.A. 57-8a-405(15), Property Insurance.
⁴ Utah Admin. Code r. 590-190-6 (1).
⁵ Utah Admin. Code r. 590-190-9 (8).
⁶ Utah Admin. Code r. 590-190-10 (2).
⁷ Utah Admin. Code r. 590-190-13.