California Insurance Code & EthicsQuestion 54 of 158
An auto insurer waits four months without responding to repeated written inquiries from an insured about coverage on a covered collision claim. Under §790.03(h)(5), this constitutes:
a.Lawful pacing of the investigation
b.A defense against bad-faith litigation
c.Failure to act reasonably promptly upon communications regarding a claim
d.Reasonable conduct so long as no payment is overdue
Explanation
Section 790.03(h)(5) defines as an unfair claims practice 'not attempting in good faith to effectuate prompt, fair, and equitable settlements of claims in which liability has become reasonably clear' and the related duty under (h)(2)/(3) to acknowledge and act reasonably promptly on communications. Months of silence without justification violate the statute.
Law Reference: Cal. Ins. Code §790.03(h)(5)Practice all 158 questions free — no signup required.
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