Effects

• According to Community Assistance Recovery, a consumer protection agency in California, victims of an earthquake in Northridge, California, and a firestorm in Oakland, California, banded together to petition the Department of Insurance to investigate Allstate Insurance Company's handling of claims. Allstate was sanctioned under the provisions of California's Unfair Claims Practices Act.
  
  

Scope

• Specific information on fair insurance practices can be found at each state's insurance information website. In general, the laws of all states prohibit the same unfair or deceptive practices, modeling their legislation on information from the National Association of Insurance commissioners.
  
  

Unfair Practices

• Insurance companies cannot knowingly misrepresent policy provisions when a consumer makes a claim, nor alter policy provisions without notifying the consumer in advance. Companies are not allowed to drag out settlements on one part of a claim in the hopes of influencing settlement on a different part. Insurance companies must acknowledge claims promptly and process claim expeditiously. In the event of natural disasters, companies may not deny claims in mass, nor deny single claims without a compelling reason.