What is one key aspect that defines unfair claims settlement practices?

One key aspect that defines unfair claims settlement practices is settling claims based on incomplete or misleading information. This practice undermines the integrity of the claims process and can lead to policyholders being denied fair compensation for their losses. By basing decisions on inaccurate or insufficient data, insurance companies may fail to honor the actual terms of the policy, leaving policyholders in difficult situations. Fair claims settlement practices aim to ensure that all claims are assessed thoroughly based on complete and accurate information, allowing for just and timely compensation. This protects the interests of policyholders and maintains trust in the insurance system.