What is an insurer's obligation to an insured in terms of claims?

An insurer's obligation to an insured in terms of claims primarily involves investigating claims thoroughly and paying valid ones. This responsibility is rooted in the principle of good faith and fair dealing, which requires insurers to assess claims objectively and fairly. When an insured submits a claim, the insurer must evaluate the details of the claim against the coverage provided in the policy. This process includes gathering necessary information, such as documentation and any other evidence related to the claim.

Paying valid claims is essential as it reflects the insurer’s accountability and ensures that the insured receives the benefits they are entitled to under the policy. This obligation fosters trust between the insurer and the insured and encourages policyholders to fulfill their duties as well, such as paying premiums. Consequently, the insurer's thorough investigation and payment of legitimate claims are fundamental aspects of their role in the insurance process.