Claims Handling Practices - Mississippi
September 3, 2019
Claims Adjusting Standards
Mississippi has not adopted the Unfair Claims Settlement Practices Act. Certain guidelines for insurers may be found at Miss. Code Ann. § 83-9-5, which are explained within.
Hurricane Claims Standards
The Mississippi Insurance Department issued a hurricane preparedness opinion on June 3, 2019, which is available on the Department’s website: https://www.mid.ms.gov/newsroom/opinions/2019/Opinion062019.pdf
Duty of Good Faith
Mississippi allows first-party claimants to sue insurers for bad faith. Chapman v. Coca-Cola Bottling Co., 180 So. 3d 676, 681 (Miss. Ct. App. 2015). To prevail on a claim, an insured must prove that the insurer:
- Lacked an arguable or legitimate basis for denying the claim; or
- Committed a willful or malicious wrong; or
- Acted with gross and reckless disregard for the insured’s rights.
An insurer liable in bad faith may be subject to an award of punitive damages. But the fact that an insurer’s decision to deny benefits may ultimately turn out to be incorrect does not in and of itself warrant an award of punitive damages if the decision was reached in good faith. Id. Where an insurance carrier denies or delays payment of a valid claim, punitive damages will not lie if the carrier has a reasonable cause for such denial or delay. Id.
Under Mississippi law, a finding of coverage is a necessary predicate to bringing a bad faith claim. Sobley v. S. Nat. Gas Co., 210 F.3d 561, 564 (5th Cir. 2000).
Public insurance adjusters are subject to ethical requirements codified at Miss. Code Ann. § 83-17-523.
Communication, Investigation, and Payment Deadlines
Miss. Code Ann. § 83-9-5(1)(f)-(h)(1) (2019).
Furnish forms to claimant for filing proofs of loss within 15 days of receiving notice of claim.
Pay all benefits payable under policy for a clean claim within 25 days after receipt of written proof of loss where claim is submitted electronically.
Pay all benefits payable under policy for a clean claim within 35 days after receipt of written proof of loss where claim is submitted in paper format.
Notify provider or the insured of the reasons why the claim or portion thereof is not clean and will not be paid and what substantiating documentation and information is required to adjudicate the claim as clean within 25 days after receipt of an electronic claim.
Notify provider or the insured of the reasons why the claim or portion thereof is not clean and will not be paid and what substantiating documentation and information is required to adjudicate the claim as clean within 35 days after receipt of a paper claim.
Pay any claim or portion thereof resubmitted with the additional supporting documentation and information requested within 20 days after receipt of resubmitted claim.
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