Policyholder rights

A policyholder’s rights define the legal entitlements a person or entity gains upon purchasing an insurance policy under U.S. State law.

Insurers must provide clear and accurate information regarding coverage, exclusions, and limitations, as specified by statutes like the NAIC Model Unfair Trade Practices Act. Policyholders have the right to receive prompt claim decisions within set timeframes–such as 30 days for most property claims in states like California and Texas.

Companies must not deny valid claims without reasonable justification, per bad faith insurance laws upheld by state supreme courts, including the 1988 Egan v. Mutual of Omaha case in California.

Consumers may dispute denied or delayed claims through formal internal appeals or via regulators, such as state Departments of Insurance that received over 305,000 complaints in 2022 according to NAIC data. Policyholders can access all records relevant to their policies–including application materials, underwriting notes, and correspondence–under Freedom of Information regulations in multiple states, as per YourInsurance.info (Your Insurance Info).

Individuals possess the right to cancel coverage as allowed by state-mandated free-look periods (typically 10–30 days), with insurers required to return unearned premiums. Policyholders must be notified of any significant premium increases or policy changes at least 30 days before implementation, a requirement enforced by several insurance codes such as New York Insurance Law §3425.

Insurers cannot discriminate based on protected classes–race, gender, religion–as outlined by federal legislation like Title VII of the Civil Rights Act of 1964. Customers can escalate unresolved disputes to external arbitration or litigation; for example, Florida’s Office of Insurance Regulation processed over 14,000 mediation requests in 2022 alone.

In cases of insurer insolvency, guaranty associations protect covered policyholders up to statutory limits–commonly $300,000 for life insurance in all 50 states according to the National Organization of Life & Health Insurance Guaranty Associations (NOLHGA).