The American Association for Justice (AAJ) has exposed some of the most underhanded ways insurance companies attempt to make money at the expense of victims in a publication called Tricks of the Trade: How Insurance Companies Deny, Delay, Confuse and Refuse. According to the AAJ, insurance companies have trillions of dollars in assets, pay their CEOs more than in any other industry, enjoy average profits of over $30 billion a year, deny valid claims to boost their bottom lines, and they are “victimizing the victims.” AAJ scolds insurance companies for using dirty tactics such as: 1) denying valid claims to boost profitability, 2) delaying claims until death, knowing that many claimants will simply give up, and 3) outright confusing claimants.
Denying Valid Claims
AAJ exposed some insurance companies for having incentive programs for adjusters who undervalued claims. Some of the nation’s biggest insurance companies—Allstate, AIG, Farmers, and State Farm—the ones that spend billions on advertising to earn your trust, systematically denied valid claims in an attempt to increase profitability. Here are some examples:
- “Allstate gave employees who denied valid claims rewards such as portable fridges, and used a ‘boxing gloves’ approach to policyholders who refused to accept lowball offers.”
- “Farmers even ran an employee incentive program, ‘Quest for Gold,’ that offered incentives, including $25 gift certificates and pizza parties, to adjusters who met low payment goals.”
- “When AIG units lost money, former CEO Maurice Greenberg would put in place new teams of staff to systematically reject thousands of valid claims.”
- State Farm was accused of fraud in an incident where company officials allegedly forged signatures on waivers of coverage to avoid paying out valid claims.
Delaying Until Death
According to Mary Beth Senkewicz, former senior executive at the National Association of Insurance Commissioners, “insurance companies make money when they don’t pay claims . . . . They’ll do anything to avoid paying, because if they wait long enough, they know the policyholder will die.” According to a former Conseco agent, “[the insurance company] made it so hard to make a claim that people either died or gave up.”
AAJ blasts insurance companies for using dense incomprehensible contracts that consumers simply do not understand. ” In trying to make sense of insurance contracts in a South Carolina case, the State Supreme Court concluded, ‘insurers generally are attempting to convince consumers when selling the policy that everything is covered and convince the court when a claim is made that nothing is covered.'”
How to Avoid Being Taken Advantage of by Insurance Companies
The AAJ advises claimants to fight for their rights, and not to give up. If you wish to pursue a claim against an insurance company, hiring a skilled personal injury attorney or wrongful death lawyer is likely the best way to fight underhanded insurance practices. We have experience dealing with insurance adjusters, and we know the common tricks that they may attempt to use. We are adamant about protecting the rights of our clients as we seek to defeat underhanded insurance tactics. Recently, an insurance company tried to deny a valid claim where their insured was clearly at-fault. Ms. Tien threatened to pursue bad faith insurance litigation against the insurance company for their baseless refusal to pay the claim, and the insurance company sent a favorable settlement check shortly after. For a free case evaluation, contact our dedicated injury lawyers.