State RegulationsAZ specificDifficulty 2/5
Under Arizona insurance law governing claims payment, an insurer that receives a claim in which liability has become reasonably clear must do which of the following?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Arizona's claims payment provisions, A.R.S. 20-462, and the unfair claims framework require insurers to attempt in good faith to effectuate prompt, fair, and equitable settlements of claims in which liability has become reasonably clear.
Why the other options are wrong
- A) Conditioning action on attorney involvement is contrary to the duty of prompt, fair settlement.
- B) Payment does not await a Department order; the duty is self-executing under A.R.S. 20-462.
- D) Demanding re-executed documents to stall payment would itself be an unfair practice.
Memory hook
Clear liability plus a fair offer — the 20-462 way.