Ethics and Unfair Claims Practices
Ethics and unfair claims practices tests the adjuster's conduct: good faith, honesty, fairness, privacy, and compliance with Minn. Stat. §72A.201. The exam expects you to identify unfair practices and choose the response that protects the insured and the integrity of the claim file.
Standards of conduct
An adjuster must not misrepresent policy provisions, delays, or coverage; must not offer less than a reasonable person would believe is owed; must not threaten or intimidate; and must not disclose claim information without authority. Conflicts of interest must be disclosed. Suspected fraud should be documented and referred to the insurer's special investigation unit, not negotiated away.
Unfair claims practices
Section 72A.201 prohibits failing to acknowledge a claim within 10 business days, failing to investigate promptly, denying without a written explanation, and failing to pay undisputed benefits. The claim file should show the facts, the coverage analysis, the damages analysis, and the basis for settlement.
Worked example
An insured asks the adjuster to include undamaged rooms in a water-loss estimate 'because the insurer owes it.' The adjuster refuses, explains that payment must reflect direct physical damage and the policy's valuation terms, documents the conversation, and estimates only the damaged areas. If the request suggests intentional inflation, the adjuster refers it to SIU.
Traps
Do not confuse advocacy for the insured with misrepresentation; do not use a release to conceal an uncovered claim; and do not ignore a public adjuster's authorized role.