If you listen or watch the news much, especially around election time you would think that the only thing insurance companies ever do is pay claims. And not only do they pay claims, but they pay nothing but frivolous claims. And of course that is why your insurance rates are so high and why the above title would be a headline.
Politicians scream loud about the need for tort reform and about how there are too many lawsuits and too many people looking for a free ride. This is especially true in a Texas where there is a very conservative political environment. This is an issue that helps get a lot of politicians elected. George Bush was always invoking the evils of “trial lawyers”.
So based on the above you would think it is unusual for an insurance company to actually deny a claim and that the companies only exist to pay people unwarranted claims. This thought is far from reality.
The reality is that the insurance companies play hardball when a claim is made. Not only do they play hardball but they also “cheat”. Yeah I said it, “They Cheat”.
One of the focuses of my practice and specifically my insurance law practice is going after and suing insurance companies that wrongfully deny claims. In doing that, I have found fraud, forgery, breaches of contracts, deceptive trade practices, and mis-representations in all kinds of form and manner.
Keep in mind that when a person buys insurance from an insurance company, the insurance company is making a bet. The bet is that you will pay them money for their protection but they will never have to protect you or if they do, they will pay out less than they took in from you. Whenever you make a claim for insurance benefits, the insurance company is losing its bet. They do not like losing their bets.
The first thing an insurance adjuster does when a claim is made is to verify whether or not there is coverage for the claim made. Example; a person is involved in a wreck and his car is a total loss. The driver calls in a claim for the insurance company to pay for the damage to his car. The adjuster checks to see if the driver had collision coverage. If all the driver had was liability then it may be an easy call, claim denied. But what if the driver had collision coverage? Then the agent looks for other things such as missed or late payments, mis-representations on the application, excluded driver, etc. And finally if everything looks good a dishonest agent or adjuster may make up a reason for denying the claim.
Finally when they decide they are on the hook for the claim then they look for reasons to lower the total amount of money they are going to have to pay such as low balling you on the value of the vehicle.
Keep in mind that insurance companies are making record profits, even after paying large salaries and bonuses to its upper management. And yeah, even after paying all those frivolous claims people make.
The reality is they deny claims all the time and deny proper claims made by good and honest people such as yourself who only expect the insurance company to live up to the bargain they entered into with you when you bought their insurance.