You are a claims handler for an insurer. A policyholder of the insurer is a farmer who has submitted a claim in respect of the following losses caused by a lightning strike: Total loss of a tractor that caught fire when it was struck by lightning. Fire damage to crops grown to feed the farm animals. The cost of hiring a replacement tractor. The cost of purchasing replacement feed for the farm animals. Due to administrative issues within the insurer, the agreed claim settlement was significantly delayed. This resulted in additional tractor hire costs due to the excessively long period it took to settle the claim. Consequently, the farmer has also claimed for this additional hire cost. Discuss the farmer’s legal remedy for the delay in settling the claim. Refer to one statute in support of your discussion.

Previously, insurers were under no express obligations to settle claims prudently and timely. However, with the introduction of the UK Insurance Act of 2015, this changed. The piece of legislation introduced a raft of policyholder-friendly provisions in insurance contracts regarding the claims handling processes. Particularly, it marked a departure from past practices that limited the rights of policyholders to recover money lost due to administrative delays by insurance companies when settling claims. Notably, Section 13 A of the UK Insurance Act of 2015 discusses the need for claims to be settled in “reasonable time,” thereby improving a policyholder’s lot when making claim settlements.

The Insurance Act of 2015 also contains an implied duty for insurers to pay claims promptly. The area of law relevant to this field relates to insurance’s obligations in managing claims. Particularly, the Insurance Conduct of Business (ICOBS) rules are applicable in this case law because they limit the grounds for rejecting claims and taking unreasonable amounts of time to settle them. It also contains provisions relating to how managers should take reasonable care not to make misrepresentations or breach warranties and conditions that safeguard contracts. The provisions of Chapter 8 of the ICOBS rules highlight general procedures that insurers should follow when processing claims. The Chartered Insurance Institute describes them by noting that insurers should:

  • Handle claims promptly and fairly
  • Provide reasonable guidance for the insured to make a claim and receive relevant information relating to its processing
  • Refrain from unreasonably rejecting a claim
  • Settle claims promptly when a settlement has been completed

The above-mentioned guidelines point to the need for insurance companies to settle claims in a reasonable time. However, no generally approved criteria for defining the least amount of time needed to settle a claim exist. Instead, these facts are decided on a case-by-case basis. For example, in Sprung v Royal Insurance (1997), a claimant sued his insurance company for damages incurred when his business was closed due to the insurance company’s inability to act in “reasonable time” to process the claim.

A Court of Appeal ruled that it was incorrect to expect payment for a breach of an insurance claim brought to action as a result of an implied term of acting in “reasonable time.” Therefore, it argued that the best way to make a claim against the insurance company was to do so under a contract of insurance policies. Thus, the main considerations for assessing the reasonability of time in settling claims are the size and complexity of insurance agreements. At the same time, the law also provides that insurance companies should adequately investigate or asses facts to effectively conclude such claims.

Therefore, there is a need to review each case based on its merits or demerits. Based on developments in insurance law described above, the farmer’s legal remedy under the doctrine of proximate cause is to use for “additional interests” mentioned in the law that could be recouped when an insurance firm fails to act fairly to the policyholder when settling claims. The administrative delay caused an increase in hiring costs for the tractor, meaning that the farmer suffered damages due to the failure of the insurance company to meet its end of the contractual obligation.

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Academic.Tips. (2022) 'You are a claims handler for an insurer. A policyholder of the insurer is a farmer who has submitted a claim in respect of the following losses caused by a lightning strike: Total loss of a tractor that caught fire when it was struck by lightning. Fire damage to crops grown to feed the farm animals. The cost of hiring a replacement tractor. The cost of purchasing replacement feed for the farm animals. Due to administrative issues within the insurer, the agreed claim settlement was significantly delayed. This resulted in additional tractor hire costs due to the excessively long period it took to settle the claim. Consequently, the farmer has also claimed for this additional hire cost. Discuss the farmer's legal remedy for the delay in settling the claim. Refer to one statute in support of your discussion'. 9 October.

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Academic.Tips. (2022, October 9). You are a claims handler for an insurer. A policyholder of the insurer is a farmer who has submitted a claim in respect of the following losses caused by a lightning strike: Total loss of a tractor that caught fire when it was struck by lightning. Fire damage to crops grown to feed the farm animals. The cost of hiring a replacement tractor. The cost of purchasing replacement feed for the farm animals. Due to administrative issues within the insurer, the agreed claim settlement was significantly delayed. This resulted in additional tractor hire costs due to the excessively long period it took to settle the claim. Consequently, the farmer has also claimed for this additional hire cost. Discuss the farmer's legal remedy for the delay in settling the claim. Refer to one statute in support of your discussion. https://academic.tips/question/you-are-a-claims-handler-for-an-insurer-a-policyholder-of-the-insurer-is-a-farmer-who-has-submitted-a-claim-in-respect-of-the-following-losses-caused-by-a-lightning-strike-total-loss-of-a-tractor-th-2/

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Academic.Tips. 2022. "You are a claims handler for an insurer. A policyholder of the insurer is a farmer who has submitted a claim in respect of the following losses caused by a lightning strike: Total loss of a tractor that caught fire when it was struck by lightning. Fire damage to crops grown to feed the farm animals. The cost of hiring a replacement tractor. The cost of purchasing replacement feed for the farm animals. Due to administrative issues within the insurer, the agreed claim settlement was significantly delayed. This resulted in additional tractor hire costs due to the excessively long period it took to settle the claim. Consequently, the farmer has also claimed for this additional hire cost. Discuss the farmer's legal remedy for the delay in settling the claim. Refer to one statute in support of your discussion." October 9, 2022. https://academic.tips/question/you-are-a-claims-handler-for-an-insurer-a-policyholder-of-the-insurer-is-a-farmer-who-has-submitted-a-claim-in-respect-of-the-following-losses-caused-by-a-lightning-strike-total-loss-of-a-tractor-th-2/.

1. Academic.Tips. "You are a claims handler for an insurer. A policyholder of the insurer is a farmer who has submitted a claim in respect of the following losses caused by a lightning strike: Total loss of a tractor that caught fire when it was struck by lightning. Fire damage to crops grown to feed the farm animals. The cost of hiring a replacement tractor. The cost of purchasing replacement feed for the farm animals. Due to administrative issues within the insurer, the agreed claim settlement was significantly delayed. This resulted in additional tractor hire costs due to the excessively long period it took to settle the claim. Consequently, the farmer has also claimed for this additional hire cost. Discuss the farmer's legal remedy for the delay in settling the claim. Refer to one statute in support of your discussion." October 9, 2022. https://academic.tips/question/you-are-a-claims-handler-for-an-insurer-a-policyholder-of-the-insurer-is-a-farmer-who-has-submitted-a-claim-in-respect-of-the-following-losses-caused-by-a-lightning-strike-total-loss-of-a-tractor-th-2/.


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Academic.Tips. "You are a claims handler for an insurer. A policyholder of the insurer is a farmer who has submitted a claim in respect of the following losses caused by a lightning strike: Total loss of a tractor that caught fire when it was struck by lightning. Fire damage to crops grown to feed the farm animals. The cost of hiring a replacement tractor. The cost of purchasing replacement feed for the farm animals. Due to administrative issues within the insurer, the agreed claim settlement was significantly delayed. This resulted in additional tractor hire costs due to the excessively long period it took to settle the claim. Consequently, the farmer has also claimed for this additional hire cost. Discuss the farmer's legal remedy for the delay in settling the claim. Refer to one statute in support of your discussion." October 9, 2022. https://academic.tips/question/you-are-a-claims-handler-for-an-insurer-a-policyholder-of-the-insurer-is-a-farmer-who-has-submitted-a-claim-in-respect-of-the-following-losses-caused-by-a-lightning-strike-total-loss-of-a-tractor-th-2/.

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"You are a claims handler for an insurer. A policyholder of the insurer is a farmer who has submitted a claim in respect of the following losses caused by a lightning strike: Total loss of a tractor that caught fire when it was struck by lightning. Fire damage to crops grown to feed the farm animals. The cost of hiring a replacement tractor. The cost of purchasing replacement feed for the farm animals. Due to administrative issues within the insurer, the agreed claim settlement was significantly delayed. This resulted in additional tractor hire costs due to the excessively long period it took to settle the claim. Consequently, the farmer has also claimed for this additional hire cost. Discuss the farmer's legal remedy for the delay in settling the claim. Refer to one statute in support of your discussion." Academic.Tips, 9 Oct. 2022, academic.tips/question/you-are-a-claims-handler-for-an-insurer-a-policyholder-of-the-insurer-is-a-farmer-who-has-submitted-a-claim-in-respect-of-the-following-losses-caused-by-a-lightning-strike-total-loss-of-a-tractor-th-2/.

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