I published this post yesterday, but have revised it thanks to some comments from Andrew Caplan, a partner at Burns & Levinson, http://www.burnslev.com/, regarding some overgeneralizations in my original post.
Massachusetts has a number of consumer-friendly laws, but you have to know how to use them for them to be of use to you.
Mass. Gen. Laws ch. 176D § 3(9) makes it unlawful for an insurer to use such tactics as ignoring communications from an insured with respect to a claim; failing to to make a prompt and fair settlement offer where claims are reasonably clear; or failing to provide a prompt and reasonable explanation of the reason for a denial of a claim.
With respect to insureds who are individuals (such as people making a claim under their homeowner's policy or personal automobile policy), a violation of 176D is also a violation of Mass. Gen. Laws ch. 93A, the Massachusetts consumer protection statute. Where the insured is a business, trial courts generally consider a violation of 176D to be sufficient proof of a violation of 93A, but are not required to do so.
When an insurer violates ch. 93A it is liable for the insured's court costs and attorney's fees, and may also be liable for double or triple damages.
The first step for an individual pursuing a claim for a violation of 176D and 93A is to write a "demand letter." The insurer has thirty days to respond to a demand letter with a reasonable offer of settlement. If the insurer does not respond with a reasonable offer of settlement within thirty days, it will be liable for double or triple damages if the court finds that the failure to make a reasonable offer was "in bad faith with knowledge or reason to know that the [original] act or practice complained of" was a violation of 93A.
In a future post I will discuss what you should say in a demand letter.