If an adjuster denies a claim without conducting a reasonable investigation, what type of violation does this represent?

The situation described represents an unfair claims settlement practice. When an adjuster denies a claim without conducting a reasonable investigation, it highlights a failure to adhere to the standards of fairness and due process expected in the claims handling process. Insurance law typically requires that all claims be examined thoroughly and fairly.

By neglecting to investigate, the adjuster is not only violating the trust of the policyholder but also circumventing the procedures meant to ensure that decisions are based on factual, verified information. This lack of due diligence can be seen as an abuse of the claims handling process and can result in penalties against the insurer or the adjuster involved.

In contrast, the other options do not apply to this scenario. A covered claim defense refers to situations where claims may be denied based on specific exclusions or limitations in a policy, not due to improper handling by an adjuster. Supplemental coverages relate to additional protections offered by an insurer, while a legal claim denial pertains to formal legal challenges that arise after a claim has been denied, which is separate from the conduct of the adjuster during the investigation phase.