An insurance company would be guilty of an Unfair Claim Practice violation if it:

The correct answer highlights a significant aspect of fair claims handling practices that insurance companies are required to follow. Failing to acknowledge communications regarding claims within a reasonable time can create significant difficulties for policyholders seeking to understand the status of their claims. Timeliness in communication is essential for transparency and trust in the claims process. An insurance company is obligated to provide updates and respond to inquiries promptly, ensuring that claimants feel heard and supported. This practice is crucial for maintaining ethical standards and upholding the rights of policyholders.

In contrast, quickly paying claims to avoid lawsuits may not necessarily violate any laws; it could actually be seen as a proactive approach to customer service, depending on the specifics of the claims. Meanwhile, not paying an uncovered claim is not considered unfair because if a claim falls outside the terms of the policy, the insurer is not obligated to pay. Lastly, terminating an appraiser for filing fraudulent claims aligns with proper conduct as it protects the company and ensures integrity in the claims process.