What is considered an Unfair Claim Settlement Practice?

Intentionally lowballing a claim settlement is considered an unfair claim settlement practice because it undermines the insured's ability to receive a fair and just compensation for their loss. Insurers are obligated to assess claims accurately and settle them based on the actual value of the loss incurred by the policyholder. Lowballing refers to offering significantly less than what is justifiable under the terms of the policy, which can lead to financial hardship for the claimant. This practice not only erodes trust in the insurance system but also raises ethical concerns regarding the insurer's responsibility to their clients.

The other options do not align with the definition of unfair claim settlement practices. Offering the full amount owed is, in fact, compliant with fair settlement practices. Failing to return premiums collected from clients pertains to underwriting and financial practices rather than claims processing. Providing thorough customer support reflects a commitment to customer service and is a positive aspect of insurer-client relations.