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Bad Faith Insurance, Unreasonable Claim Denial

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Bad Faith Insurance, Unreasonable Claim Denial

Tactics Insurance Companies Use That Hurt Consumers But Boost Profits

In a tough economy, when consumers are already struggling financially, insurance companies are employing tactics that make it more difficult for policyholders. According to the American Association of Justice (AAJ), insurers are preying on cash-strapped consumers with tough tactics to boost profits. Jon Haber, the CEO of the American Association of Justice, was quoted as saying “the current challenges facing American families are only compounded when their insurance company plays hardball in their greatest time of need.”

The following is a summary of the ploys used by insurance companies, as identified by the AAJ:

Claims are being denied.
Some legal experts believe that there are insurance companies out there that reward employees who are able to successfully deny claims and replace employees who are not willing to participate in this practice. The AAJ has stated that insurers have also engaged in fraud to avoid paying claims.

Insurers are delaying claims.
Insurance companies have been known to delay claims. Many policyholders will eventually give up after so much time has passed from filing their claims. By not paying out claims, insurance companies are able to hold on to more of their money.

Contracts are being used that confuse consumers.
If you have ever tried to read your insurance contract, you probably became confused. More than half of the states in the country have laws that in essence state that “plain English” must be used for consumer contracts. However, many consumers are still unaware of the risks and fine print included in their insurance agreements.

Approvals and premiums are being based on credit scores.
With the current economy, many people who once had good credit scores have been negatively impacted by job layoffs, increased mortgage payments and higher expenses. As a result, these same people now have what is considered “bad credit.” Insurance companies are frequently using credit scores as a basis for determining premiums and to decide if the consumer will be approved in general for insurance.

Sick consumers are being abandoned.
Insurance companies have been retroactively canceling coverage for policyholders who have developed medical conditions that are expensive to treat. The AAJ reports that even cancer patients in the middle of chemotherapy treatment have been victims.

Dropping consumers who call.
Homeowners, who make small claims with their insurance, risk being dropped by the insurer when it comes time to renew. Some insurers count a phone inquiry the same as an actual claim.

If you have been involved in an accident in New York and are having difficulty with the insurance company, contact the New York accident attorneys at Rappaport, Glass, Greene and Levine today at 800.734.9445 for a free case evaluation. The law firm can also help you if you have been wrongfully denied insurance benefits.