Insurance Company “frivolous defense” Tactics Add to American Economic Woes

For years, the insurance companies and their paid lobbyists have spent millions of dollars on public relations campaigns to make the phrase “frivolous lawsuit” a part of our vocabulary.As a result of the insurance industry’s systematic public relations campaign, potential jurors view every personal injury lawsuit as “frivolous”; the injured people who file a lawsuit– “cheats or scammers”; and the trial lawyers who represent them – “greedy” or “ambulance chasers.”Never before has our country seen an industry spend so much money so effectively to destroy a right that was guaranteed by our Founding Fathers. That is the right to have our civil disputes decided fairly and justly by a jury of our peers.As a result, statistics show that most lawsuits get dismissed and, for those that are not, the injured men, woman and children leave the courtroom without adequate compensation to care for the injuries inflicted upon them by wrongdoers. The insurance company lawyers do not need facts or evidence to win, they merely have to say, “here’s another frivolous lawsuit” and jurors respond as though they have been conditioned to respond by the insurance companies.

But, you never hear about “frivolous defenses.”Each year, there are hundreds of thousands of claims that are wrongfully denied. Despite the economic hardships every American is facing, insurance companies continue to use tactics that highlight their true colors.These tactics range from the denial of reasonable claims, creating confusing, all the way to delaying claims until the customer dies.

The tactics insurance companies use against consumers include:

·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.

·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.”

·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.

·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.

·Abandoning the Sick: Health insurers looking to cut costs have taken to retroactively canceling, or rescinding, the policies of people whose conditions have become expensive to treat. Some insurance companies have even offered bonuses to employees who meet “cancellation goals” – cancer patients in the middle of chemotherapy have even been targeted.

·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.

The insurance industry is a multi billion-dollar industry – with more money than most countries.With insurance companies not holding up their side of the deal, expect even the most miniscule claim to be a painful and aggravating process.In order to improve your bargaining power, you should always consider hiring legal representation to help you with your insurance claims.

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Study Reveals Worst Insurance Companies for Consumers

The American Association for Justice issued a report this Wednesday naming the worst insurance companies for consumers in the US.  According to the report, “the rankings show a distinct pattern of insurance industry greed amongst 10 companies that refuse to pay just claims, employ hardball tactics against policyholders, reward executives with extravagant salaries, and raise premiums while hoarding excessive profits.”

The following companies were selected after a six-month review of information from court documents, SEC records, FBI records, state insurance department investigations/complaints, nationwide news accounts and testimony of former insurance agents.  Surprisingly, the companies in the “top five” are well-known and pretty popular choices among American consumers:

1. ALLSTATE – CEO, Thomas Wilson; 2007 compensation, $10.7 million; 2007 profits, $4.6 billion; assets: $156.4 billion. “According to investigations and documents Allstate was forced to make public, the company systematically placed profits over its own policyholders… The amount Allstate paid in claims dropped from 79 percent of its premium income in 1996 to just 58 percent 10 years later. In auto claims, payouts dropped from 63 percent to just 47 percent.

2. UNUM – CEO, Thomas Watjen; 2007 compensation, $7.3 million; 2007 profits, $679 million; assets, $52.4 billion. “Unum, one of the nation’s leading disability insurers, has long had a reputation for unfairly denying and delaying claims..”

3. AIG – CEO, Robert Willumstad; 2007 compensation for former CEO, 14.3 million; 2007 profits: $6.2 billion; assets, $1.06 trillion; “AIG executives have also come under fire for opportunistically seeking price increases during catastrophes. Now the company has been labeled ‘the new Enron’ because of charges of multibillion-dollar corporate fraud.”

4. STATE FARM – CEO: Edward B. Rust Jr.; 2007 compensation, $11.7 million; 2007 profits: $5.5 billion; assets, $181.4 billion. “In many cases, the company has gone to extreme lengths to avoid paying claims, including forging signatures on earthquake waivers after the deadly Northridge earthquake, and altering engineering reports regarding damage after Hurricane Katrina.”

5. CONSECO – CEO, C. James Prieur; 2007 compensation: $2.6 million; 2007 profits: $179.9 million; assets: $33.5 billion. “Conseco sells long-term-care policies, typically to the elderly. Unfortunately, Conseco uses the deteriorating health of its policyholders to its advantage because the company knows if it waits long enough to pay out claims, its customers will die.”

What’s not surprsing, however, is the fact that insurance representatives from the above mentioned companies have wasted no time attacking the trial lawyers behind the study.  A spokesman for Allstate told the press, “We’re not surprised we’re being targeted by the trial and personal injury lawyers because Allstate has always been at the forefront of the fight against insurance fraud and the effort to resist unreasonable demands made by lawyers.”

The sad part is that any person with insurance knows that you pay an arm and a leg for insurance “just incase,” but when an accident happens, its a nightmare to get what you deserve.  It doesn’t take a trial lawyer to point that out– although they are in the best position to make that allegation because they deal with insurance companies on a day to day basis.

I don’t think consumers are buying this argument either. After all, its awfully hard to feel sorry for a CEO (such as Allstate’s Thomas Wilson), who racks in $10.7 million a year, while most people struggle just to pay their bill.

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