True or False: An insured must always be informed of the grounds for claim payment by an insurer.

The assertion that an insured must always be informed of the grounds for claim payment by an insurer is indeed true. This practice is a fundamental principle of transparency and fairness in the insurance industry. Insurers have a duty to communicate clearly with their policyholders regarding the reasons behind their decisions related to claim payments. This allows insured individuals to understand why a claim may have been approved or denied and ensures that they are fully aware of the basis on which their claims are evaluated.

This requirement is rooted in consumer protection regulations, which aim to enhance accountability and trust between insurers and policyholders. It helps insured parties to evaluate their options, whether that be to accept the payment, discuss it further with the insurer, or potentially pursue other avenues if they disagree with the decision.

In contrast, options that suggest the insured is only informed upon request or only for large claims do not recognize the insurer's responsibility to maintain transparent communication at all times, regardless of the claim amount or the insured's initiative to seek clarification. Therefore, the correct understanding is that informing an insured about the grounds for claim payment is a continuous obligation of the insurer.