2006 Code of Virginia § 38.2-510 - Unfair claim settlement practices

38.2-510. Unfair claim settlement practices.

A. No person shall commit or perform with such frequency as to indicate ageneral business practice any of the following:

1. Misrepresenting pertinent facts or insurance policy provisions relating tocoverages at issue;

2. Failing to acknowledge and act reasonably promptly upon communicationswith respect to claims arising under insurance policies;

3. Failing to adopt and implement reasonable standards for the promptinvestigation of claims arising under insurance policies;

4. Refusing arbitrarily and unreasonably to pay claims;

5. Failing to affirm or deny coverage of claims within a reasonable timeafter proof of loss statements have been completed;

6. Not attempting in good faith to make prompt, fair and equitablesettlements of claims in which liability has become reasonably clear;

7. Compelling insureds to institute litigation to recover amounts due underan insurance policy by offering substantially less than the amountsultimately recovered in actions brought by such insureds;

8. Attempting to settle claims for less than the amount to which a reasonableman would have believed he was entitled by reference to written or printedadvertising material accompanying or made part of an application;

9. Attempting to settle claims on the basis of an application that wasaltered without notice to, or knowledge or consent of, the insured;

10. Making claims payments to insureds or beneficiaries not accompanied by astatement setting forth the coverage under which payments are being made;

11. Making known to insureds or claimants a policy of appealing fromarbitration awards in favor of insureds or claimants for the purpose ofcompelling them to accept settlements or compromises less than the amountawarded in arbitration;

12. Delaying the investigation or payment of claims by requiring an insured,a claimant, or the physician of either to submit a preliminary claim reportand then requiring the subsequent submission of formal proof of loss forms,when both contain substantially the same information;

13. Failing to promptly settle claims where liability has become reasonablyclear, under one portion of the insurance policy coverage in order toinfluence settlements under other portions of the insurance policy coverage;

14. Failing to promptly provide a reasonable explanation of the basis in theinsurance policy in relation to the facts or applicable law for denial of aclaim or for the offer of a compromise settlement;

15. Failing to comply with 38.2-3407.15, or to perform any providercontract provision required by that section;

16. Payment to an insurer or its representative by a repair facility, oracceptance by an insurer or its representative from a repair facility,directly or indirectly, of any kickback, rebate, commission, thing of value,or other consideration in connection with such person's appraisal service; or

17. Making appraisals of the cost of repairing an automobile that has beendamaged as a result of a collision unless such appraisal is based upon apersonal inspection by a representative of the repair facility or the insurerwho is making the appraisal.

B. No violation of this section shall of itself be deemed to create any causeof action in favor of any person other than the Commission; but nothing inthis subsection shall impair the right of any person to seek redress at lawor equity for any conduct for which action may be brought.

C. 1. No insurer shall prepare or use an estimate of the cost of automobilerepairs based on the use of an after market part, as defined herein, unless:

The insurer discloses to the claimant in writing either on the estimate or ina separate document attached to the estimate the following information:

"THIS ESTIMATE HAS BEEN PREPARED BASED ON THE USE OF AUTOMOBILE PARTS NOTMADE BY THE ORIGINAL MANUFACTURER. PARTS USED IN THE REPAIR OF YOUR VEHICLEBY OTHER THAN THE ORIGINAL MANUFACTURER ARE REQUIRED TO BE AT LEAST EQUAL INLIKE KIND AND QUALITY IN TERMS OF FIT, QUALITY AND PERFORMANCE TO THEORIGINAL MANUFACTURER PARTS THEY ARE REPLACING."

2. "After market part" as used in this section shall mean an automobilepart which is not made by the original equipment manufacturer and which is asheet metal or plastic part generally constituting the exterior of a motorvehicle, including inner and outer panels.

(Code 1950, 38.1-52; 1952, c. 317, 38.1-52.9; 1977, c. 529; 1978, c. 441;1979, c. 324; 1980, c. 404; 1986, c. 562; 1988, c. 29; 1999, cc. 709, 739;2000, c. 187; 2001, c. 335.)