Tricks of the Trade: How Insurance Companies Deny, Delay, Confuse and Refuse (and what you can do about it)

Get rid of them, they are causing our health care to cost more.

Mom used to say that insurance companies would take over the country.........and then the world:)

Lawyers and Insurance companies already run the world.....

I have Allstate for Home and Auto, never had a problem-only one claim on each policy-once was a leaking roof (first year we owned our home) and a portion of a tree fell on my truck.  Both resolved w/o a problem, though I have had Allstate for a long time (over 20 years).

I have my camp, snowmobiles and ATVs with Nationwide (Special discount program)-never had to make a claim, knock on wood, on any of those.  But, let's see I have a policy for:  House, Cars, Camp, Snowmobiles, ATVs-that's 5 separate policies.  And most of them are not cheap, though my wife and I have really clean driving records.

I was curious becasue you had said that you have never really had to "claim" anything because you have never had an accident, etc. and after 20 years there should be some 'acknowledgement' through a break or two on that monthy payment to an insurance company that benefits from your responsiblity and care.

Have you been tagged as a preferred customer, with a reduced charge?  that kinda thing.

Well I feel I'm opening a huge can of worms admitting this, but I'm an insurance agent for one of these companies.  I'd like to put my two cents in regarding some of these claims.

Denying Claims: Some of the nation's biggest insurance companies, Allstate, AIG, and State Farm among others,- have systematically denied valid claims in an attempt to boost their bottom lines. These companies have rewarded employees who successfully denied claims,replaced employees who would not, and when all else failed, engaged in outright fraud to avoid paying claims.

I have to speak from experience here, so I cannot claim to know all......BUT, I've never heard of a valid claim being denied.  Period.  There are agents out there who might lie to their clients....telling them a covered loss is not covered, but my hope is that that is the exception, and not the rule.  And of the companies listed above, to my knowledge none of them reward their employees for denying claims.  Although I have heard of one company that does do something similar to that.

No insurance company rewards their employees for denying claims.  That's inaccurate.  But there are companies out there that give huge bonuses for agencies that have low loss ratios.  Rewarding your employees to deny claims would obviously make it difficult for a lot of people to ethically do their job.  All agents have to worry about their loss ratio, but that's really out of our control.  If you have a covered loss, you have a covered loss.

 Delaying until Death: Many insurance companies routinely delay claims, even going as far as to lock paperwork in safes, knowing full well that many policyholders will simply give up. In the words of one regulator, "the bottom line is that 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 policyholders will die."

That's the first time I've ever heard of that theory, but I don't work in claims.  I know that there has never been a time that any of my clients have had a claim be delayed in such a way.  Personally, I think it's BS.

Confusing Consumers: Insurance contracts are some of the densest and incomprehensible contracts a consumer is ever likely to see. More than half of all states have enacted "plain English" laws for consumer contracts, yet many Americans still do not fully understand the risks they are subject to.

Now that is a problem.  It's confusing for the agents, too.  There have been times when I've advised a client on a certain coverage only to find out I misinterpreted the coverage.  I know I'm not the only agent who feels that way.  If the agents can get confused it is a problem.

Discriminating By Credit Score: Insurance companies are increasingly using credit reports to dictate the premiums you pay, or whether you can even get insurance in the first place. The practice penalizes senior citizens with little credit, those who responsibly pay bills every month with cash or check, or those who have suffered financial crisis through no fault of their own.

Discriminating is the wrong word.  My company uses an algorithm that takes into account 175 things, (one of them being credit) to come up with a premium.  All premiums for all insurance policies are specific to each person.  That's not discriminatory.  I agree though, it's not exactly fair to charge a 16 year old more simply because they have no credit history, but as I said, credit is not the only thing taken into account.  Insurance is a game of numbers and statistics.  If you have no statistical history on someone, you have to assume a higher risk....at first.  That's business. 

Abandoning the Sick:

I don't handle life, health or accident insurance.....licensed for it, but don't write it.  Can't put my two cents in on this one.

Canceling for a Call: Many people are rightly reluctant to make small claims on their home insurance for fear their insurance company will raise their premiums. But few realize that insurance companies often refuse to renew a policy just for making a phone call. Often an insurance company will count an inquiry over the phone as the same as a claim, and then they will do everything in their power to drop you.

I always tell my clients to call me before calling in a claim for that exact reason.  If you call me and I tell you there is no coverage, it ends there.  If you call the claims office and they tell you there is no coverage, it shows up as a loss.  Having an insurance company not renew your policy simply because of a call sounds iffy to me.  Insurance companies would LOVE to charge you more.....not drop you.  What business sense does that make?  None.

My philosophy is keep the premiums to a minimum, with the maximum coverage.  Nobody likes to pay for insurance, myself included.  But the litigious world we live in requires us to have it, so make it as painless as possible.

Wow, you seem like a nice person.  But you really need to know that there are many of us out here who have experienced, personally, the very things that have been listed in this article.

My mother died of Ovarian too, like PE said his mother did.  But hte problem for my mother was the disability they took out of her check and never paid. She had to fight and got 36$ a month.

You know, sometimes the good have to be willing to see the ways in which 'their" industry fails.  It is the good that have been to quiet, and we are now hearing from only the rationalizing opportunitists.

as a recent adult college graduate, I have been unable to find a job, and I fear my credit rating may be the problem.  I have been a single parent and went years without health insurance (low wage jobs,no benefits) and now my degree can't even balance out the risk that my credit rating seems to imply.

God Bless America and Americans, have a good day and thanks for being so level in your discussion, it seems to be a difficult task lately on the vine.