Six Strategies Used by Insurance Companies To Boost Profits At the Expense of Co ...

You purchased your insurance policy with confidence that you would be protected in the case of an emergency. The insurance agent may have sat down with you and explained your coverage and the details of the policy you were purchasing. Once you signed the dotted line, you probably didn’t spend a whole lot of time thinking about your insurance, until it came time to file a claim. Many large insurance companies have been known to employ tactics that make it challenging for policyholders to collect on their claims.

The American Association for Justice (AAJ), identified several ploys used by some of the largest insurers to boost profits at the expense of customers. These insurance tactics include the following:

Denying insurance claims. It is believed that some insurance companies actually reward employees when they are able to successfully turn down claims. Insurers have also been known to replace employees who are not willing to engage in this practice.

Claims are being delayed. Have you wondered why it is taking so long to get paid on your claim? It could be that the insurance company is hoping you will just give up or forget. This practice has even been referred to as “delay until death.” When the insurance company delays payments on claims, it is able to hold on to more of its cash.

Confusing contracts provided to consumers. Insurance contracts can be confusing, especially for consumers who are unfamiliar with the industry and the various types of coverage. Many states require that insurance companies use “plain English,” but these contracts are still hard to understand.

Credit scores used to approve coverage and set premiums. The economy has played a toll on many consumers’ pocketbooks and credit scores. Even people who once had good credit have been negatively impacted, which is reflected in their FICO scores. Insurance companies frequently use these scores to base their approvals and premiums.

Abandoning sick policyholders. While insurance is most crucial when you are sick and need medical attention, many insurers are retroactively canceling coverage for consumers who have developed ailments that require expensive treatment. According to the AAJ, cancer patients have been dropped during chemotherapy treatment.

Dropping coverage because of a phone call. Some insurance companies now count a phone call as an actual claim. Filing a claim can increase your risk of being dropped by your insurer and now, apparently a phone call can do the same thing.

If you have been the victim of bad faith insurance tactics or are in the middle of an insurance dispute, contact an Orlando insurance dispute lawyer at the law offices of Lilly, O’Toole & Brown, LLP at (863) 533-5525 for legal advice.