Paying For Insurance and Getting your Claim Denied
Paying insurance can be feel like throwing money away, because you give your hard earned money to a faceless company and see nothing in return – unless something terrible happens. Yet, even when the unexpected happens and you ask your insurance agency for help in exchange for all the money you have been giving them for months, years, or even decades, they turn the other cheek and deny your claim. How are they denying your insurance claim, and why?
The U.S. insurance industry is the largest in the world in when it comes to revenue. Thanks to insurance premiums, since 2011 the annual revenue of the industry has exceeded $1.2 trillion dollars! In the words of one regulator according to the American Association for Justice, “the bottom line is that insurance companies make money when they don’t pay claims…They’ll do anything to avoid paying.”
Denying Your Insurance Claim
Some of the nation’s biggest insurance companies— Allstate, AIG, and State Farm among others—have denied valid claims in an attempt to boost their profits.
These companies have gone to such lengths as: rewarding employees who successfully deny claims, replaced employees who would not, and when all else failed, engaged in outright fraud to avoid paying claims!
Here are some of the ways insurance companies avoid paying insurance claims.
Confusing You on Your Insurance Claim
Insurance contracts are as fun to read and understand as the terms and agreement contract on any Apple product for a reason. It has gotten so bad that many states had to pass “plain English” laws for consumer contracts. Yet, many of us are still unaware of the risks we may be subjected to.
After the events of Hurricane Katrina, insurance companies avoided paying claims by using something called an “anti-concurrent” clause.
An anti-concurrent causation clause is a little-known but very common clause in home insurance policies. The best way to explain what this clause means is through example:
Most homeowner insurance policies do not cover flood damage. Now imagine a home was damaged during a hurricane and its roof was ripped apart. That same home is later flooded due to the rain during that same hurricane. The insurance company might refuse to pay for any of the damage because the policyholder lacked flood insurance. It’s a case of being covered for one specific weather condition, but since storms usually bring a combination of wind, rain, and lightning, an insurance company can deny a claim altogether.
These are the cases in which an attorney is often required to help those who have been left with nothing and are struggling to get what they deserve.
Credit Score Discrimination
Insurance companies are using credit reports to determine the premiums consumers pay, or whether they can even get insurance in the first place. The practice can penalizes the poor, senior citizens with little credit, and those who have suffered a financial crisis through no fault of their own. Insurance companies have refused renewals to consumers because of a lack of credit history, even though they always pay their bills on time in cash. Others have seen auto rate hikes near 600% despite clean driving records, only because their credit scores were low or they suffered a financial crisis.
Delaying Until Death
Many insurance companies routinely delay claims, knowing full well that many policyholders will simply give up. Some have gone so far as to lock paperwork away in safes. The most shameful, and darkest, use of delay tactics has been by long-term care insurers, who often take advantage of their policyholders’ age and ill health. They will delay paying a claim for as long as they can, and do anything to avoid paying, because if they know if they wait long enough, the policyholders will die.
Abandoning the Sick
Healthcare can be very expensive, that’s why we need healthcare insurance. Because healthcare can be so expensive some insurance companies have even offered bonuses to employees who meet “cancellation goals.” Targeting patients in the midst of treatment when they are at their most vulnerable—even cancer patients in the midst of chemotherapy have been targeted. Looking to cut costs by canceling retroactively, or rescinding, the policies of people whose conditions have become expensive to treat.
Canceling for a Call
One shouldn’t have to put off filing an insurance claim out of fear of increased premiums, or having their policy cancelled, but the fear is very real. Insurance companies often refuse to renew a policy just because the policyholder called about the possibility of making a claim. Many times an insurance company will count an inquiry over the phone as a claim, and then they will do everything in their power to drop the policyholder. They want to avoid paying for a claim before a claim is even filed!