Rhode Island Insurance Adjuster Exam

What is the role of an insurer when handling claims?

1. To deny all claims quickly

2. To investigate and resolve claims fairly

3. To provide legal representation

4. To promote penalty fees

The correct answer is: To investigate and resolve claims fairly

The role of an insurer when handling claims is to investigate and resolve claims fairly. This involves evaluating the circumstances surrounding the claim, determining whether the policyholder’s claim is valid according to the terms of the insurance policy, and then making a fair decision on how to settle the claim. The insurer is obligated to act in good faith and adhere to principles of fairness and transparency throughout the claims process. Investigating claims fairly includes gathering all relevant information, such as police reports, witness statements, and any other pertinent documents, to ensure that the decision made reflects the actual facts of the situation. This is crucial as it helps maintain trust between the insurer and policyholders, ensuring that those who are entitled to compensation receive it promptly and justly. In contrast, denying all claims quickly or promoting penalty fees would undermine the insurer’s responsibility to their clients and could lead to legal repercussions or loss of business. Providing legal representation is not a primary role of insurers in the claims process; instead, it typically falls within the purview of the insured or their legal counsel if disputes arise.