State RegulationsAZ specificDifficulty 2/5
An Arizona adjuster repeatedly tells claimants that their policies contain a coordination-of-benefits clause that the policies do not actually include, hoping claimants will accept lower settlements. Which unfair claims settlement practice does this most directly illustrate?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Arizona's enumerated unfair claims practices, A.R.S. 20-461 and A.A.C. R20-6-801, include misrepresenting pertinent facts or insurance policy provisions relating to the coverages at issue. Inventing a clause to suppress settlements fits squarely within that practice.
Why the other options are wrong
- A) Claim-file maintenance is not the practice described; the adjuster is misstating policy terms.
- B) Coercion involves concerted pressure tactics against market participants, not misdescribing policy provisions to claimants.
- C) False financial statements under A.R.S. 20-447 concern falsified filings, not claim negotiations.
Memory hook
Invented clauses = misrepresented policy provisions under R20-6-801.