Trade Practices

ORS 746.230
Unfair claim settlement practices


An insurer or other person may not commit or perform any of the following unfair claim settlement practices:


Misrepresenting facts or policy provisions in settling claims;


Failing to acknowledge and act promptly upon communications relating to claims;


Failing to adopt and implement reasonable standards for the prompt investigation of claims;


Refusing to pay claims without conducting a reasonable investigation based on all available information;


Failing to affirm or deny coverage of claims within a reasonable time after completed proof of loss statements have been submitted;


Not attempting, in good faith, to promptly and equitably settle claims in which liability has become reasonably clear;


Compelling claimants to initiate litigation to recover amounts due by offering substantially less than amounts ultimately recovered in actions brought by such claimants;


Attempting to settle claims for less than the amount to which a reasonable person would believe a reasonable person was entitled after referring to written or printed advertising material accompanying or made part of an application;


Attempting to settle claims on the basis of an application altered without notice to or consent of the applicant;


Failing, after payment of a claim, to inform insureds or beneficiaries, upon request by them, of the coverage under which payment has been made;


Delaying investigation or payment of claims by requiring a claimant or the claimant’s physician, naturopathic physician, physician assistant or nurse practitioner to submit a preliminary claim report and then requiring subsequent submission of loss forms when both require essentially the same information;


Failing to promptly settle claims under one coverage of a policy where liability has become reasonably clear in order to influence settlements under other coverages of the policy;


Failing to promptly provide the proper explanation of the basis relied on in the insurance policy in relation to the facts or applicable law for the denial of a claim; or


Any of the practices described in ORS 746.233 (Unfair claim settlement practices with respect to prior authorizations of health care items or services).


No insurer shall refuse, without just cause, to pay or settle claims arising under coverages provided by its policies with such frequency as to indicate a general business practice in this state, which general business practice is evidenced by:


A substantial increase in the number of complaints against the insurer received by the Department of Consumer and Business Services;


A substantial increase in the number of lawsuits filed against the insurer or its insureds by claimants; or


Other relevant evidence. [1967 c.359 §588a; 1973 c.281 §1; 1989 c.594 §1; 2014 c.45 §79; 2015 c.59 §6; 2017 c.356 §101; 2019 c.284 §10]

Notes of Decisions

Insurance underwriter must exercise good faith and due care in the negotiations and settlement of claims in behalf of its insured. The insurer has duty to exercise at least the same degree of care as to the insured's interest as it exercises as to its own. Grumbling v. Medallion Ins. Co., 392 F Supp 717 (1975)

This section applies to settlement of claims filed against insureds by third parties, as well as claims filed against insurance companies by their insureds. Farris v. U.S. Fid. and Guar. Co., 284 Or 453, 587 P2d 1015 (1978)

Violation of section of this statute requiring insurers to settle claims promptly and in good faith where liability is reasonably clear does not give rise to tort action. Employers' Fire Ins. v. Love It Ice Cream, 64 Or App 784, 670 P2d 160 (1983)

Failure of insurer to attempt settlement after entry of adverse excess judgment may give insured cause of action against insurer. Goddard v. Farmers Insurance Co., 173 Or App 633, 22 P3d 1224 (2001), Sup Ct review denied


Last accessed
Jun. 26, 2021