Insurance Denials: Why You Shouldn’t Take “No” for an Answer
Policyholders pay their premiums, and, in return, they expect to have insurance
coverage when the need arises. To their dismay, too many policyholders find that
their legitimate claims are being denied. In addition to claims denial, bad
faith insurance tactics may include unreasonably delaying processing or payments
or making a quick, lowball settlement offers.
It is important to understand that insurance companies are in business for
profit, and the less they pay out for claims, the more profit they make. If your
insurer has denied a valid claim, refuse to take “no” for an answer. Instead,
speak with an experienced personal injury lawyer about an insurance bad faith claim.
Insurance Company Bad Faith Tactics
Insurance bad faith encompasses a wide range of shady dealings on the part of
insurance companies. The following are common examples of bad faith practices:
- Denying a claim for no reason: An insurance company should
always give you a reason for denying a claim. You may have a bad faith claim
against an insurer that has denied a claim for an invalid reason, or without
giving a reason at all. For example, after an auto accident, your insurance
company must give you a valid reason if it denies your claim for repairs. - Offering less than a claim is worth: It is acting in bad
faith when an insurance company intentionally makes you a lowball offer, for
example, by offering to cover only a small portion of your medical expenses
after a car accident, when you have considerably more medical coverage. - Putting insurance company profits over paying a policyholder’s valid
claim: It is bad faith for an insurance company to avoid paying a valid claim for
the sake of its own profits. One example of these bad faith tactics is when
an adjuster dealing directly with a truck accident victim uses intimidation,
bullying, and other shady tactics to get the victim to accept a lowball
settlement. - Refusing to approve a physician referral: Workers injured
on the job are sometimes referred by their authorized treating physicians to
different doctors or specialists. The insurance company may fight the
recommendation, which delays treatment until the injured worker can get the
referral approved. - Delaying payment: Insurance companies are engaging in bad
faith tactics when they unreasonably delay payment of valid claims. For
example, an insurer may approve repairs to a vehicle after a car crash, but
delay cutting a check to the repair shop or the policyholder for several
months. - Failing to conduct a complete investigation promptly: Insurance companies are required under the law to handle claims in a
timely manner. If you have a fire in your home, for example, and file a
claim with your homeowners’ insurance, the insurer should act promptly to
conduct a complete investigation. In some cases, insurance companies will
delay the investigation or deny claims without fully investigating the
incident.
Facts About the Insurance Industry
The American Association for Justice (AAJ) published a report on the ten worst
insurance companies in America, which are raising premiums, denying claims, and
refusing insurance to those who need it most. This report covers a range of
insurance fields, including homeowners’, auto, health, life, and disability.
Researchers conducted a comprehensive investigation that included data from
thousands of court documents, state insurance department investigations and
complaints, FBI and SEC records, and testimony of former insurance agents and
adjusters. The report states that:
- The U.S. insurance industry takes in more than $1 trillion in premiums
annually. - The property/casualty insurance industry is enjoying annual profits of more
than $30 billion a year. - In a recent year, CEOs of the top ten insurance companies earned an average
of $8.9 million in property/casualty and $9.1 million in health insurance.
Median insurance CEO earnings for the entire industry are $1.6 million per
year.
Putting Profit over Policyholders
As stated in the AAJ report, some insurance companies have discovered that they
make more money when they don’t pay claims. Their game is to deny, delay, defend
– or do anything to avoid payouts. Some companies even have training manuals on
how to avoid making payments. For example, Allstate’s stated mission is to earn
a return for its shareholders. The company privately instructs its agents to use
a hardball, “boxing gloves” strategy against its policyholders.
What to Do If Your Insurance Company Denies Your Claim
If you believe you have a valid claim and your insurance company has denied it,
your best course of action is to speak with an experienced bad faith insurance
attorney as soon as possible. The same holds true for any other insurance bad
faith tactics, such as unreasonable delays in investigating or paying a claim.
Dan Sorey, our lead attorney, is a seasoned Texas and New Mexico trial lawyer
with extensive experience in successfully representing injured people and
effectively dealing with insurance companies. Contact The Sorey Law Firm P.L.L.C
at (903) 207-5526 right away if you have been a victim of insurance bad faith.