Rules for Fair Insurance Companies

Insurers should fully and fairly investigate a claim. Mistakes happen. However, if an insurer follows best practices, then mistakes will not be needlessly or intentionally overlooked. When an insurance company needlessly or intentionally overlooks covered losses, the policyholder pays the price.


  • The adjuster should listen and reasonably consider damages and losses pointed out by the policyholder or their representative.
  • If the adjuster can’t tell whether the loss was caused by a covered event or an excluded cause, the adjuster must either recommend coverage or investigate further. The burden is on the insurer to show the excluded event caused the loss.
  • An insurer may never coerce the policyholder into using a particular vendor or provider of repair services. Similarly, the insurer cannot penalize the policyholder for using a contractor of their choice.
  • Policy exclusions must be clear and understandable to an average, reasonable person. This applies to not only the language in isolation but the language wherever it appears in the policy.
  • Any ambiguity in the policy should be construed in favor of coverage.
  • An insurance company that denies a claim for one reason cannot add to those reasons after a lawsuit is filed.
  • An insurance company cannot compel an insured to litigation in order to recover what they would be due under the policy.