Delay, Deny, Defend Puts Profits Over People

Endless forms, arbitrary rules, and oceans of fine print discourage claims.

If you’ve ever had to file an insurance claim, you know the frustration that seems baked into the maze of endless forms and confusing small print. Companies that once lived up to their promise to be “a good neighbor” when disaster strikes dramatically shifted business practices in the 1990s to meet Wall Street’s demands for short-term profits. The result is chronicled in the book Delay, Deny, Defend: Why Insurance Companies Don’t Pay Claims and What You Can Do About It by distinguished Rutgers law professor Jay Feinman. Not surprisingly, insurance companies are recording astronomical profits as a result. Here’s how it works:

Trick #1: Deny, Deny, Deny Claims
Insurance companies will outright deny that an accident occurred or that the policyholder was seriously injured. Some companies even offer gifts and bonuses to employees who deny claims and keep payments to a minimum. Arbitrary rules will crop up, often referencing provisions that do not exist or that contradict a previous statement. The hope is that denial after denial will defeat and deflate claimants, making them feel they have no choice but to throw in the towel.

Trick #2: Delay Paying as Long as Possible … Even Until Death
You’ve jumped through all the hoops, and the insurance company has agreed to pay the claim. So, you can rest easy, right? Think again. Delaying payment is another common tactic to boost profits. Insurance companies are known to send out incorrect forms and then blame claimants for the error or set short time limits on when a claim can be filed after an accident, injury, or illness. In cases involving elderly or gravely ill claimants, some insurance companies have even delayed payments in hopes that the customer dies before they have to pay.

Trick #3: Defend in Court
Following a denied claim or a delayed payment, insurance companies know they can further delay writing a check by defending their questionable tactics in court. Billions of dollars in profits and thousands of high-priced lawyers on the payroll mean they are always ready for a trial. Insurance companies know that many of their customers may be afraid or unwilling to hire a lawyer. They use that fear to convince claimants that a court battle would only end in an insurance company victory.

Forcing claimants to sue is one way insurance companies fail customers.

Getting Paid What You Deserve

What can David do against these insurance-company Goliaths? Here are some tips on what to do before, during, and after filing a claim with an insurance company:

• Pick a reputable company: It pays to do a little homework before signing on the dotted line. Start with this list of the 11 worst insurance companies from The National Law Journal.
• Read your policy carefully: You should know precisely what is covered and what you need for an appeal if your claim is denied.
• Double- and triple-check forms: An incorrectly filled-out form can be used by an insurance company to deny or delay claims. Simple errors are also often an excuse to retroactively deny coverage. Be thorough and honest on every form you fill out.
• Do not cash the check right away: Insurance companies will send checks with lowball offers or pay premium refunds if they rescind your coverage. Cashing these checks can be legally interpreted as accepting an offer.
• Get everything in writing: If you need to fight your insurance company, you may need to produce every bill, form, and piece of correspondence.
• Reach out for help: An experienced plaintiff’s lawyer can guide you through your claims process and provide the firepower necessary to challenge the insurance company in court if necessary.