What Counts As An Unfair Insurance Claim Practice In North Carolina?

Your Rights When a North Carolina Insurer Mishandles Your Claim

Key Takeaways: In North Carolina, an unfair insurance claim practice is conduct specifically prohibited by N.C. Gen. Stat. § 58-63-15(11) in how an insurer handles, investigates, or pays a claim. Examples include misrepresenting policy terms, ignoring communications, refusing to pay without a reasonable investigation, failing to affirm or deny coverage in a reasonable time after proof of loss, failing to explain denials, and making lowball offers that push policyholders toward a lawsuit. For regulatory enforcement, the conduct must occur often enough to show a general business practice. In private lawsuits, however, courts have held that conduct described in § 58-63-15(11) can support a claim under the Unfair and Deceptive Trade Practices Act, N.C. Gen. Stat. § 75-1.1, without proof of a pattern. Detailed records of calls, letters, estimates, photos, and receipts are often key to proving unfair treatment. Because remedies depend on the facts and strict deadlines apply, including those in your policy, it is generally wise to act early and talk with an experienced property insurance attorney.

In North Carolina, an unfair insurance claim practice generally means conduct that state law specifically prohibits in how an insurer handles, investigates, or pays a claim. The main list is in N.C. Gen. Stat. § 58-63-15(11), often called North Carolina’s unfair claims settlement practices provisions. Prohibited conduct includes misrepresenting policy language, failing to respond reasonably promptly to your communications, refusing to pay without a reasonable investigation, and making lowball offers that push you toward a lawsuit. If you are a homeowner, condominium owner, homeowners association, or business owner dealing with hurricane, storm, fire, hail, or water damage, these rules may help you hold your insurer to the standards the law sets.

If you think your insurer is delaying, underpaying, or wrongly denying your claim, the team at Kuhn Raslavich, P.A. can review your situation. Call us at 877-352-7767 or contact us now to talk about your options.

What the Unfair Claims Settlement Practices Act Covers in North Carolina

North Carolina sets out its claim-handling standards in Chapter 58 of the General Statutes, which governs insurance in the state. The key provision, N.C. Gen. Stat. § 58-63-15(11), lists specific acts that count as unfair claim settlement practices. These rules apply broadly to insurers doing business in North Carolina, including those handling property claims.

The statute contains an important qualifier. For regulatory purposes, the listed acts count as unfair claim settlement practices when an insurer commits them “with such frequency as to indicate a general business practice.” Private lawsuits are treated differently. In Gray v. North Carolina Insurance Underwriting Ass’n (2000), the North Carolina Supreme Court held that conduct violating § 58-63-15(11) can support a claim under the Unfair and Deceptive Trade Practices Act, N.C. Gen. Stat. § 75-1.1, without proof of a general business practice. A policyholder must still prove the other elements of that claim, including actual injury caused by the conduct. How this applies depends heavily on the facts and on which provision is involved.

Scholarly analysis can help you understand how these standards developed. For example, the North Carolina Law Review, published through the UNC School of Law, has examined how courts interpret these provisions. The statute and binding court decisions control.

Common Unfair Claim Practices Policyholders Encounter

Several prohibited behaviors show up again and again in North Carolina property insurance claims. The table below summarizes some of the most common ones under N.C. Gen. Stat. § 58-63-15(11).

Prohibited Practice	Statutory Provision	What It May Look Like
Misrepresenting facts or policy provisions	§ 58-63-15(11)(a)	An adjuster says your roof damage “isn’t covered” when the policy language says otherwise
Failing to acknowledge and act reasonably promptly on communications	§ 58-63-15(11)(b)	Weeks of unreturned calls and emails after you report a loss
Failing to adopt and implement reasonable standards for prompt investigation	§ 58-63-15(11)(c)	No inspection scheduled long after a hurricane claim is filed
Refusing to pay without a reasonable investigation	§ 58-63-15(11)(d)	A denial issued before anyone looks at the damage
Failing to affirm or deny coverage within a reasonable time after proof of loss is completed	§ 58-63-15(11)(e)	No coverage decision long after you submit proof of loss
Not attempting in good faith a prompt, fair, and equitable settlement when liability is reasonably clear	§ 58-63-15(11)(f)	Stalling on a clearly covered fire loss
Compelling litigation through substantially low offers	§ 58-63-15(11)(g)	An offer far below what you later recover in court
Failing to promptly explain the policy basis for a denial or compromise offer	§ 58-63-15(11)(n)	A denial letter with no explanation of its reasoning

Misrepresentation of Policy Terms

Misrepresenting pertinent facts or insurance policy provisions relating to the coverages at issue is expressly listed as an unfair practice. This can happen when an adjuster cites an exclusion that doesn’t apply or describes your coverage limits inaccurately. Ask for the specific policy language in writing so you can compare it with what the adjuster said.

Delays and Inadequate Investigations

Insurers must adopt and implement reasonable standards for the prompt investigation of claims. They are also prohibited from refusing to pay claims without a reasonable investigation based on all available information. After a major storm such as Hurricane Helene, many western North Carolina homeowners reported long delays before inspection and denials that seemed to ignore obvious damage. A rushed or one-sided investigation may fall within conduct the statute prohibits.

Lowball Offers That Force Litigation

An insurer may not compel policyholders to file lawsuits to recover amounts due by offering substantially less than the amounts they ultimately recover. If an insurer’s estimate leaves out entire categories of damage or prices repairs far below local costs, that gap may become relevant evidence. Whether a specific offer crosses the line depends on the facts, and an honest disagreement over value is not automatically a violation.

💡 Pro Tip: Ask your insurer for a copy of the adjuster’s full estimate, including line items and photos. Comparing it with an independent estimate can help show where an underpayment may lie.

How Unfair Practice Rules Are Enforced

North Carolina enforces these standards through two separate channels: regulatory action and civil litigation. They work independently and may lead to different results.

Regulatory Enforcement by the Commissioner of Insurance

The North Carolina Commissioner of Insurance has authority to investigate insurers and take action against those that engage in unfair claim settlement practices. A complaint with the Department of Insurance may lead to an inquiry, but it is separate from a civil lawsuit. The Department generally cannot order an insurer to pay your claim, and a complaint does not pause any deadlines that apply to a court case or under your policy.

Civil Claims by Policyholders

Policyholders may have several civil remedies, depending on the facts. A breach of contract claim generally focuses on whether the insurer failed to pay what the policy owes. North Carolina courts have recognized that conduct violating N.C. Gen. Stat. § 58-63-15(11) can support a claim under N.C. Gen. Stat. § 75-1.1. A successful claim leads to treble (triple) damages under N.C. Gen. Stat. § 75-16, and the court may award attorney’s fees in certain circumstances under N.C. Gen. Stat. § 75-16.1. Bad faith can arise as a separate tort claim, which generally requires proof that the insurer refused to pay in bad faith together with aggravating conduct. Each theory has its own elements and limitations periods, and many policies set their own filing deadlines, which courts generally enforce strictly.

Documenting Unfair Treatment of Your Claim

Strong documentation can often decide whether an unfair practice claim can be proven. Insurers keep detailed claim files, so policyholders should keep their own records as well. Consider keeping:

• A written log of every call, including the date, the adjuster’s name, and what was said

• Copies of all letters, emails, estimates, and denial letters

• Photos and video of the damage taken before any repairs

• Receipts for emergency repairs and temporary housing

• Your complete certified policy, including all endorsements

These records can show patterns of delay, misrepresentation, or unexplained denials. If your claim is with a large national carrier, you may find our guide on State Farm claim denials in North Carolina useful.

💡 Pro Tip: Put important requests to your insurer in writing, even after a phone call. A written record can make it harder to dispute what was asked and when.

Results for North Carolina Property Owners

Our firm has represented North Carolina policyholders against major insurers. In an underpaid Hurricane Helene claim in Buncombe County, Kuhn Raslavich recovered $325,000 for the homeowners. Past results do not guarantee a similar outcome, because every claim depends on its own facts and policy terms.

Frequently Asked Questions

1. Does a single unfair act violate N.C. Gen. Stat. § 58-63-15(11)?

For regulatory enforcement, the statute requires the conduct to occur often enough to indicate a general business practice. In private litigation, North Carolina courts have held that conduct violating § 58-63-15(11) can support a claim under N.C. Gen. Stat. § 75-1.1 without proof of a pattern.

2. Can I sue my insurer directly under the unfair claims settlement practices act?

North Carolina courts have held that § 58-63-15(11) does not create a standalone private right of action. Instead, policyholders often bring these claims through N.C. Gen. Stat. § 75-1.1, along with breach of contract or bad faith claims where the facts support them.

3. Should I file a complaint with the Department of Insurance?

A complaint may lead to a regulatory review, but that process is separate from a civil lawsuit. The Department generally cannot order payment of your policy benefits, and a complaint does not extend any court or policy filing deadlines.

4. What if my insurer won’t explain why it denied my claim?

Failing to promptly explain the policy basis for a denial or compromise offer is listed as an unfair practice under § 58-63-15(11)(n). Ask for the explanation in writing and keep a copy of every response.

5. Do these rules apply to commercial property claims?

The statute applies to insurers handling claims in North Carolina, which can include commercial property policies. Commercial policies often contain different terms, so a careful policy review is important.

Protecting Your Claim Going Forward

North Carolina law sets standards for how insurers must handle property claims, and knowing them may put you in a stronger position. Misrepresentations, ignored communications, inadequate investigations, unexplained denials, and lowball offers may all fall within the unfair claims settlement practices act. Remedies depend on your facts, your policy, and strict filing deadlines, so acting early is generally wise. An experienced North Carolina property insurance claims lawyer can help you weigh your options.

If your claim has been delayed, underpaid, or denied, Kuhn Raslavich, P.A. is ready to help. Call 877-352-7767 or schedule your consultation today so we can review your claim.

Disclaimer: This content is for informational purposes only and is not legal advice. Every case is unique, and results may vary. Consult an attorney about your specific circumstances.