Which practice is described as part of the Florida Unfair Insurance Trade Practices Act?

• A. Failing to explain claim denials in writing
• B. Charging premiums above market rates
• C. Refusing to insure low-risk drivers without basis
• D. Approving claims without investigation

Answer: (A)

Unfair claim handling practices require insurers to act in good faith and communicate clearly when a claim is denied. Specifically, when a claim is denied, the insurer must provide a written explanation that shows the basis for denial, referencing the policy provisions and the facts of the claim. This written rationale helps the insured understand why the claim wasn’t covered and what steps they can take next. Not giving this written explanation undermines fair handling of claims and is exactly the type of behavior the Florida Unfair Insurance Trade Practices Act targets.

The other options involve different aspects of insurance regulation. Charging premiums above market rates relates to pricing and rate filings, not the specific claim-handling unfair practices. Refusing to insure low-risk drivers without a basis touches on underwriting discrimination, which is regulated separately. Approving claims without investigation would also be improper, as the act requires a reasonable investigation in the claims process, but the canonical, exam-tested example of an unfair claim practice is failing to provide a written explanation for a denial.