Which of the following can be a result of unfair claims practices?

The consequence of unfair claims practices often leads to legal action against the insurer. Engaging in such practices can result in violations of state regulations regarding fair treatment of policyholders. This can manifest as claims denials based on invalid reasons, unreasonably delaying claim payments, or failing to conduct a thorough investigation of claims. When insurers do not comply with fair practices, they expose themselves to lawsuits, regulatory penalties, and other legal repercussions, which can stem from policyholders or regulatory agencies seeking to hold them accountable for their actions.

In contrast, increased insurer profitability may not be directly tied to unfair practices, as long-term profitability can be jeopardized by reputational damage and loss of customers. Improved public trust in insurance companies would likely be eroded rather than enhanced by such conduct, as unfair practices tend to generate dissatisfaction and mistrust among policyholders. Streamlined claims processing is also unlikely, as engaging in unfair practices may complicate the process instead of improving efficiency. Therefore, the most accurate outcome of unfair claims practices is indeed legal action against the insurer.