The Dirty Games That Insurance Companies Play
By Gerri Elder
Insurance is big business. Insurance companies in the United States pay their CEOs more than any other industry. They do this because they certainly can afford it. The insurance industry has trillions of dollars in assets and each company, on average, reaps profits of more than $30 billion per year.
In addition to being filthy rich, a new report released by the American Association for Justice reveals that insurance companies are also just plain dirty.
The report, titled "Tricks of the Trade: How Insurance Companies Deny, Delay, Confuse and Refuse," outlines how some of the biggest insurance companies in the country routinely deny valid claims, delay claims until the policy holders give up or die, deliberately confuse customers, discriminate, abandon sick and injured people and cancel policies to ensure that they don't lose a penny of profit by paying a claim they were not forced to pay.
Deny That Claim!
According to the American Association for Justice, many of the most well-known and well-advertised insurance companies in the United States, including Allstate, AIG and State Farm, have a history of denying legitimate claims. These companies have rewarded employees who successfully saved the company money by denying claims, while sending employees who would not deny valid claims packing. AAJ charges that when all else failed, these big insurance companies have resorted to blatant fraud to avoid paying claims.
Plan B - Delay it to Death
When an outright denial just won't do, many insurance companies opt to plan B - delay. With the delay tactic, the insurance companies know that if they lock paperwork away in safes and delay policy holders for long enough, some will give up and others just might die.
Long-term care insurers have reportedly taken advantage of the advanced age and ill health of their customers by delaying claims in hopes that the policy holder with a claim will die before they have to pay.
Make Sure There is Plenty of Fine Print
Another sleazy tactic employed by insurance companies is deliberately confusing policy holders with thick, incomprehensible contracts with plenty of obscure clauses and lots of fine print. Although many states have passed "plain English" laws for consumer contracts, many people still do not fully understand their insurance contracts and the risks that they are exposed to by their insurance companies.
No Credit? Poor Credit? That's a Problem
Insurance companies also discriminate against policy holders based on their credit scores. AAJ found that insurance companies are increasingly using credit reports to screen applicants and decide how much policy holders will pay for their premiums. This practice not only penalizes poor people, but also elderly people who do not have established credit and people who have suffered from the economic recession.
Your Cash is No Good Here
Cash is not good enough for many insurance companies these days. People who routinely paid their premiums with cash are now being refused renewals because they lack a credit history. Other people get renewal offers - at a 600 percent increase in cost - because their credit scores have been dinged by recent financial problems.
Sick People Are Too Expensive
When a policy holder is costing the insurance company money, the company starts to look for ways to make it stop. Yet another despicable trick that health insurers have up their sleeves to cut costs is to retroactively cancel, or rescind, the policies of people who have medical conditions that require expensive treatment.
As an incentive to insurance company employees, some companies have offered bonuses to employees who meet or exceed "cancellation goals." When patients are most weak and vulnerable, their policies are being rescinded and the insurance company's star employees get to spend that chemotherapy money on a vacation or new car.
Just Pay the Premium. Period.
Insurance companies don't want to pay claims or hear from their policy holders. They just want you - those of you with good credit - to pay the premiums and pay them on time. Oh, and never even think about filing a claim. Apparently even considering a claim can get you cancelled. Some insurance companies decline to renew policies if the policy holder has called to inquire about a claim.
If you are sick, poor or actually need insurance coverage, buying an insurance policy really seems like a gamble. However, if you are looking to pay costly premiums and never expect anything in return, even when you really need it, a policy with one of the major insurance companies in the United States might be just what you need.