Laws Should Allow Policyholders to See the Insurance Claims File  | Property Insurance Coverage Law Blog

Transparency is fundamental to fostering honesty in any industry, particularly insurance, where trust is paramount. Advocating for fairer claims processing raises a crucial question: why are insurance companies not required to disclose their claims records to their policyholders? If adjusters perform their duties with integrity and in good faith, sharing these records should be standard practice. Such transparency would not only build trust between insurers and policyholders, but also promote accountability. This would enable policyholders to have a clearer understanding of the claims process, thereby strengthening the relationship and ensuring more fair and transparent claims resolution.

I suggest that California Insurance Code § 2071 is a good example of a law that should become commonplace:

The insurer notifies any claimant that it can obtain, upon request, copies of the documents relating to the claim. For the purposes of this section, “claim documents” means all documents relating to the assessment of damages, including, but not limited to, repair and replacement estimates and offers, appraisals, extent of losses, drawings, plans, reports, third party documents. -the conclusions of the parties on the amount of the loss, the covered damages and the cost of repairs, as well as all other calculations of valuation, measurement and adjustment of the losses of the amount of the loss, the covered damages and the cost of repairs. However, an attorney’s work product and attorney-client privileged documents, as well as documents that indicate fraud on the part of the insured or that contain medically confidential information, are excluded from the documents that ‘an insurer is required to provide to an applicant under this section. Within 15 calendar days of receiving a request from an insured for claim documents, the insurer must provide the insured with copies of all claim documents, except those excluded by this article. Nothing in this section shall be construed as affecting any existing dispute discovery rights.

Insurance company claims departments should pass laws like this. In Insurance claims rebranding: How insurers are modernizing a once-antiquated processit was noted:

…Potter said insurance companies are actively working to improve their claims processes and incorporate more empathy throughout the claims lifecycle. They are investing in modernizing their technology infrastructure, adopting automation and artificial intelligence to streamline workflows, and implementing customer-centric digital platforms that improve transparency and communication, enabling claims experiences faster and more personalized.

The law in question was a key topic during a roundtable discussion I participated in at California Association of Public Insurance Adjusters (CAPIA) annual meeting in Marina Del Rey. This raises an important consideration: If insurers are required to meet this requirement in California, shouldn’t the same standard be applied in all states? The adage “honesty is the best policy” highlights the value of transparency in promoting integrity and good faith practices within the insurance industry. Establishing uniformity in these regulations could improve the overall reliability and fairness of the industry nationwide.

Thought of the day

It is said that sunlight is the best disinfectant; electric light the most effective policeman.

—Louis Brandeis

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