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Law Update

New Statute Prohibits Knowingly Underestimating Claim Value

Session 2007, Chapter 30
Approved:  May 14, 2007
Effective:  January 1, 2008

This new statute amends RSA 417:4, which defines unfair insurance trade practices.  Subsection 417:4, XV sets out the definitions for unfair insurance claim practices.

This new provision includes “knowingly underestimating the value of a claim” as an unfair claim practice.

It would appear that this provision is intended for claims relative to property damage where the evaluation process is more likely to be based on market values.  Thus, an adjuster who provides a claimant with a repair cost estimate or total loss evaluation that is artificially low would be in violation of this statute.

Less clear is how, if at all this new rule would be applied to more subjective evaluations such as those that go into bodily injury claims and include unliquified values for pain and suffering or permanent impairment.

Additionally, an insured or claimant still may not sue an insurance carrier directly for committing an unfair insurance claim practice under RSA 417:4 without first securing a finding of such a violation from the New Hampshire Insurance Department. RSA 417:19; see Shaheen v. Preferred Mutual Insurance Co. 668 F.Supp. 716, 718 (D.N.H. 1987).  This rule has not been changed by the new statute.


Mike Wallenius




Attorneys at Law

1838 Elm Street, Manchester, NH 03104
Ph 603.634.4300 - Fax 603.626.3647

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