New York State Auto Damage and Theft Practice Test

Refusing to complete a claim until the insured has paid their renewal premium is considered a deceptive act because it implies that the payment of a premium is a prerequisite for the processing or payment of a claim. In the context of insurance, an adjuster is obligated to evaluate and settle claims based on their merit and in accordance with the terms of the policy, rather than holding up the process based on unrelated factors such as premium payments. This behavior could mislead the insured into believing that they must fulfill additional obligations before receiving their rightful benefits, which undermines the fairness and transparency required in insurance practices.

The other options illustrate actions that are typically permissible within the realm of insurance. Payment of a claim based on a properly completed proof of loss complies with standard procedures, while denying an uncovered claim is simply an application of policy terms. Timely payment of claims also reflects adherence to good faith obligations between insurance providers and their clients.