Hurricane Season will soon come to its end and our attention will shift to other potential risks from nature. For many policyholders in our northern states, heavy snowstorms could be the next threat. That’s why I dedicate this blog to Alaska, known for its heavy snows or blizzards, and for earthquakes, tsunamis, forest fires, avalanches, flooding, volcanic eruptions, and landslides. These are some of the reasons why Alaska homeowner insurance policies should at least include coverage for damages done to their dwelling by fire, earthquakes and frozen pipes.

First-party claims are regulated under the Alaska Administrative Code. The standard for a prompt investigation is that after notification, any person transacting business of insurance shall complete the process within 30 working days unless the investigation cannot reasonably be completed using due diligence.1 If this is the case, the insured should receive a written notification that states the need and reasons for additional investigative time and the specific additional time required to complete the investigation.2

Under Alaska’s Administrative Code insurance companies and any other person transacting the business of insurance that involves investigation, adjustment, negotiation, or settlement should comply with the following communication requirements:3


(1) within 10 working days after receipt of notification of a claim, give written acknowledgement to the first-party claimant identifying the person handling the claim, including the person’s name, address, telephone number, the firm name, and the file number; payment of the claim within 10 working days after notification is satisfactory; provision of necessary claim forms, written instructions, and assistance as required in (3) of this subsection as satisfactory acknowledgment; notification of a claim to an agent constitutes notification to the principal;

(2) within 15 working days after receipt, make an appropriate reply to all other communications from a first-party claimant which reasonably indicates that a response is expected; receipt of a communication by an agent constitutes receipt by the principal;

(3) upon receipt of notification of a claim, promptly provide necessary claim forms, instructions, and assistance so that the first-party claimant is able to comply with legal, policy, or contract provisions and other reasonable requirements.

The “Last Frontier” is the largest state and most of its inhabitants live in the Greater Anchorage-Kenai Peninsula area. Alaska is also known for its diverse terrain of open spaces, mountains and forests. Due to many natural disasters in Alaska’s history this state—as many others—regulates the practice of insurance law to protect its policyholders. For example, Alaska has an “Unfair Claim Settlement Practices” statute, AS § 21.36.125. Under this statute, insurance companies must comply with the following:4

(a) A person may not commit any of the following acts or practices:

(1) misrepresent facts or policy provisions relating to coverage of an insurance policy;

(2) fail to acknowledge and act promptly upon communications regarding a claim arising under an insurance policy;

(3) fail to adopt and implement reasonable standards for prompt investigation of claims;

(4) refuse to pay a claim without a reasonable investigation of all of the available information and an explanation of the basis for denial of the claim or for an offer of compromise settlement;

(5) fail to affirm or deny coverage of claims within a reasonable time of the completion of proof-of-loss statements;

(6) fail to attempt in good faith to make prompt and equitable settlement of claims in which liability is reasonably clear;

(7) engage in a pattern or practice of compelling insureds to litigate for recovery of amounts due under insurance policies by offering substantially less than the amounts ultimately recovered in actions brought by those insureds;

(8) compel an insured or third-party claimant in a case in which liability is clear to litigate for recovery of an amount due under an insurance policy by offering an amount that does not have an objectively reasonable basis in law and fact and that has not been documented in the insurer’s file;

(9) attempt to make an unreasonably low settlement by reference to printed advertising matter accompanying or included in an application;

(10) attempt to settle a claim on the basis of an application that has been altered without the consent of the insured;

(11) make a claims payment without including a statement of the coverage under which the payment is made;

(12) make known to an insured or third-party claimant a policy of appealing from an arbitration award in favor of an insured or third-party claimant for the purpose of compelling the insured or third-party claimant to accept a settlement or compromise less than the amount awarded in arbitration;

(13) delay investigation or payment of claims by requiring submission of unnecessary or substantially repetitive claims reports and proof-of-loss forms;

(14) fail to promptly settle claims under one portion of a policy for the purpose of influencing settlements under other portions of the policy;

(15) fail to promptly provide a reasonable explanation of the basis in the insurance policy in relation to the facts or applicable law for denial of a claim or for the offer of a compromise settlement; or . . . .

Settlements should be completed in a prompt, fair and equitable manner. If the conclusion of the investigation is incomplete within the 15 working days deadline than an additional written notification shall be provided 45 working days from the initial notification giving reasons that additional time is necessary to complete and provide a determination of the claim. An insurer must pay undisputed portions of the claim within 30 days of receipt of a properly executed statement of claim, proof of loss, or other acceptable evidence of loss.5 The check must be payable in cash to the payee upon presentation to a bank located in Alaska or electronic funds transfer or prepaid card.6 If you are an Alaska policyholder, be aware of these regulations under the Alaska Administrative Code that protect you during the insurance claim process.
1 Alaska Admin. Code tit. 3, § 26.050 (a).
2 Alaska Admin. Code tit. 3, § 26.050 (b).
3 Alaska Admin. Code tit. 3, § 26.040 (a) (1) (2) (3).
4 Alaska Stat. Ann. § 21.36.125.
5 Alaska Admin. Code tit. 3, § 26.070 (2).
6 Alaska Admin. Code tit. 3, § 26.070 (d) (1) (2) (3).