If you or your small business has been harmed by a large
insurance company or other big organization, there's a good chance
strong legal advocacy can help you to make it right.
If the
problem is a refusal to pay an insurance claim, the starting point is to
recognize the reality is that insurance companies make money when they
don't pay claims.
In fact, since the mid-1990s, based on a
concerted strategy developed by the McKinsey consulting firm, the
insurance industry has developed and implemented an aggressive "three
Ds" approach to avoid paying claims - deny... delay... and defend.
First,
they almost automatically deny the claim. Second, they do anything
possible to delay negotiations. Then third, they vigorously defend
against any legal action.
The Insurance Industry's Background
Legal practice experience and information obtained from insurance agents and adjusters make it clear that there's at least some truth in the books and movies that claim there is a "Chapter X" in the insurance claims manual that teaches adjusters how to deny claims.
Legal practice experience and information obtained from insurance agents and adjusters make it clear that there's at least some truth in the books and movies that claim there is a "Chapter X" in the insurance claims manual that teaches adjusters how to deny claims.
Although
these books and movies are fictional and produced for entertainment
purposes, and many legal practitioners have never heard of or
experienced a written "Chapter X" for claims denials, it is apparent
that insurance companies have "unwritten" guidelines for adjusters to
follow.
This is not a conspiracy theory. Rather, it is a
reasonable explanation of how an insurance agent makes money, and how an
adjuster earns his raises, promotions, and pats on the back for saving
the company money. In other words, these individual agents and adjusters
are simply trying to look out for themselves.
Everyone does that
to a certain extent. The problem with agents and adjusters doing it is
they are cheating and breaking the laws that regulate claims handling
procedures.
Tactics
Here is a short list of the tactics most often employed by insurance agents and adjusters to bend things in their direction in an insurance claim.
Here is a short list of the tactics most often employed by insurance agents and adjusters to bend things in their direction in an insurance claim.
o Forgery - Your signature or initials are actually forged
on papers you would have signed in the application process. In Texas,
when a person purchases auto insurance, the law requires that the
insurance company furnish the person with uninsured/underinsured
motorist (UM) benefits. This coverage provides benefits for situations
where the insured person (you) have an accident where the other driver
is uninsured or the other driver does not have enough insurance to cover
the damages. The insurance company is also required by law to provide
Personal Injury Protection (PIP) benefits, which is coverage for medical
bills and lost wages. A person who purchases auto insurance in Texas
automatically has these two coverages unless the person purchasing the
insurance rejects them in writing.
What typically happens is the
agent has the person sign the application for insurance but forgets to
have the person sign the "rejection of UM and PIP" coverage. Later, when
that person is involved in an accident and makes a claim for these
benefits, the agent discovers there is a signature on the application
but the "rejection" was not signed. So, the agent forges the signature
or cuts and pastes with a copier to transpose the application signatures
onto the rejection forms.
o 515 Exclusion - Another example in
the auto insurance area occurs when a husband and wife buy insurance.
The husband might have a previous DWI conviction or too many tickets so
that, if he is on the policy with his wife, the rates go too high for
them to be able to afford the coverage. So, they purchase the insurance
under the wife's name only and sign what is called a "515 exclusion,"
which provides that if anything happens while the husband is driving the
car, there is no insurance coverage.
Some agents will have the
"515 exclusion" signed, but avoid putting a name on the form indicating
who is excluded. Later, if a claim is made, if the driver is someone
other than the named insured, (in this example, the wife) the agent will
complete the 515 form with that person's name, saving the company from
having to pay any money on the claim.
o Fill-in-the-Blank - An
agent helping you prepare an application for auto, homeowners, life,
health, or commercial insurance will ask a lot of questions, write your
answers on the application form, and then put the form in front of you
for signature. What is not obvious is that the agent knows how each of
the questions needs to be answered for you to be qualified for coverage.
If you answered the agent's question in a way that would have resulted
in coverage being rejected, the agent likely ignored what you said and
answered in a way that results in coverage being extended. The agent is
motivated to complete the sale and earn the commission. The agent also
knows that the statistical odds are heavily against a claim being made.
However, if you do later file a claim, the agent and the insurance
company have created for themselves the option to accuse you of fraud
and lying on the application you signed, and using this as grounds for
denying your claim.
o Improper Denial - Many policies include
paragraphs and clauses that are not legal or legally enforceable. But
the general public, including you, typically is not aware of this
subterfuge. So if you make a claim, the insurance company will reply to
you with a letter citing one or more of the improper clauses or
paragraphs as the basis or reason for denying your claim.
Delay
As indicated earlier, what is seen most often from insurance companies is delaying tactics. The purpose of this is to frustrate you into giving up, dropping the claim or accepting less in compensation than you should accept just to get it over with. In other words, they intend to "wear you out."
As indicated earlier, what is seen most often from insurance companies is delaying tactics. The purpose of this is to frustrate you into giving up, dropping the claim or accepting less in compensation than you should accept just to get it over with. In other words, they intend to "wear you out."
This is accomplished in several ways.
They usually start out with a pleasant manner, although some choose
actual rudeness. It starts with the first call. Whether the tone is
pleasant or bothered, you have to look past their words and see what
happens.
You can expect to see some or all of the more obvious ways of frustrating you.
o Putting you on hold for a long time - they will deliberately do this in hopes you will hang up.
o Your calls to them will only get voice mails, and no immediate return call.
o Transferring your file to different adjusters.
o Giving you incorrect claim number information. Later, when the number you are using does not connect with your case, they can imply you wrote down the wrong claim number.
o Putting you on hold for a long time - they will deliberately do this in hopes you will hang up.
o Your calls to them will only get voice mails, and no immediate return call.
o Transferring your file to different adjusters.
o Giving you incorrect claim number information. Later, when the number you are using does not connect with your case, they can imply you wrote down the wrong claim number.
This will be followed by the
less obvious tactics, the ones that make it seem they are trying to get
your situation handled but, guess what, not really.
o Mail
Dodgeball - You may asked to mail a document of some sort, usually a
bill, to substantiate part of the claim. After you mail it and have not
heard anything back, when you call they say they have not received it
(they really did). You resend the document. Then they ask for another
document. Replay previous.
o Never-ending Document Requests -
Then, days or weeks later, they ask for another document. After you make
sure they've received it, they say "thank you for sending that, now we
need..." a form filled out, a report taken, a statement, to talk with a
witness, or doctor, or appraiser. More time goes by. Next they ask for a
copy of your tax return. (This is illegal 95% of the time). While all
of this is going on you are, 1) inconvenienced, 2) dealing with your
job, 3) dealing with your family life, and 4) dealing with the loss
which is the reason you are making the claim in the first place.
o
Unnecessary Time and Expenses - You are spending time on the phone and
doing the things the insurance adjuster has requested, spending money on
postage, sometimes including certified mail, and spending time and
effort obtaining records and copies. Needless to say, you are getting
sick and tired of this process. Worse, you know you are being screwed
around with, but you do not want to take the time or spend the money to
talk with an attorney about this for fear of driving up the total costs
involved. So, you give up. When you give up, the insurance company has
won.
The Basic Principle
You will be well-served to remember this basic principle: The business of insurance is a bet. Insurance is nothing more than a large company with a larger balance sheet playing the odds against you...on your health, risk of an accident, storm damage, theft, death or other potentially catastrophic loss. Insurance companies educate themselves in extreme detail on the odds of actually having to pay on a claim. From this data, they can calculate how much they can charge you based on the eventually that some claims will be made, and still make a profit.
You will be well-served to remember this basic principle: The business of insurance is a bet. Insurance is nothing more than a large company with a larger balance sheet playing the odds against you...on your health, risk of an accident, storm damage, theft, death or other potentially catastrophic loss. Insurance companies educate themselves in extreme detail on the odds of actually having to pay on a claim. From this data, they can calculate how much they can charge you based on the eventually that some claims will be made, and still make a profit.
When
they pay a claim, they have lost their bet. They do not like losing
their bet. It all boils down to money. They don't want to lose their bet
on insurance!
There are laws regulating how insurance companies
handle claims. The Humphreys Law Firm is familiar with these laws and
handle these types of situations against insurance companies on a daily
basis. It costs nothing to talk to with them and in most cases payment
of fees waits until the case is resolved and the insurance company is
required to pay legal fees or reimburse you for anything paid up front.
How to Beat The Insurance Company Strategy
There are ways to beat the 3-Ds strategy and all of its tactics and permutations. When your claim is denied or if you're being stonewalled... here are 5 things to do immediately:
There are ways to beat the 3-Ds strategy and all of its tactics and permutations. When your claim is denied or if you're being stonewalled... here are 5 things to do immediately:
1. Document
everything. Write down the details of conversations, keep letters from
the company, copies of forms you've filled out. All with the dates and
the names of people you spoke with.
2. Recall the details. Think
back to the start of the claim - an accident, property damage, death,
injury...whatever the cause of your loss. Write down all the information
about it that you can remember.
3. Get all the official records...your policy, reports, statements, forms, explanations of benefits. Make copies if necessary.
4.
Continue doing what's needed to repair the damage. If you're supposed
to be getting medical treatment or repairs on a car or property,
continue doing so.
5. Contact an insurance attorney. Actually,
this should be the first step you take, and he'll tell you to do the
other four. Listen to what he says and follow his instructions.
Regardless
how large or strong your opponent is, you can win with this proof...and
with an experienced insurance lawyer who is willing to fight it out.
