When an insurer denies a claim, what disclosure must it provide?

When an insurer denies a claim, it is required to provide the specific reason for the denial to the policyholder. This disclosure is crucial as it ensures transparency and fairness in the claims process. By clearly outlining the reasons for denial, the insurer helps the policyholder understand the basis on which the claim was evaluated. This allows the policyholder to assess the situation, determine if they agree with the insurer's assessment, and consider any potential options for appeal or further discussion regarding their claim.

Providing specific reasons for denial also aligns with regulatory requirements in many jurisdictions, which are designed to protect consumers and uphold their rights. It is important for policyholders to receive this information promptly so they can take any necessary actions in response to the denial.