North Carolina Adjuster Practice Exam 2025 - Free Adjuster Practice Questions and Study Guide

An insurer can be found guilty of Unfair Claims Settlement Practices if they mishandle a claim. This term refers to actions taken by an insurer that are deceptive, unfair, or not in compliance with established regulations when processing claims. Examples of such practices include failing to conduct a reasonable investigation, denying claims without a valid reason, or delaying payment unreasonably. The principles of fair treatment and integrity in the claims handling process are paramount. If an insurer does not adhere to these principles, they risk facing legal penalties and regulatory scrutiny, underscoring the importance of ethical behavior in the insurance industry.

The other options do not pertain to violations of law or unethical practices. Normal business operations, common industry errors, and standard practice procedures are not in themselves indicators of wrongdoing; they are typical aspects of how businesses function within the industry. However, mishandling a claim can lead to significant repercussions under the umbrella of unfair practices, reflecting the insurer's obligation to act fairly and transparently.