Insurance Delaying Paying Claim

People in Grand Prairie, Arlington, Fort Worth, Dallas, Colleyville, Lake Worth, Keller, Roanoke, Saginaw, North Richland Hills, and other places in Texas will get very frustrated when their insurance company delays in paying a claim. Here is some general information about this happening.
Most insurance companies will pass off claims delays as fluke occurrences. What is important to realize is that these actions, or lack thereof, are actually routine and intentional conduct. A lot of this is the result of the McKinsey system, set up by McKinsey & Company. This system for “lowballing” claims payments is driven by the claims performance management and pay systems from the top to the bottom of the organization.
A Rutgers law professor who has studied this, has suggested that the deck is stacked against individuals who make claims. He says, “You have an accident or a fire in your house. You call up the insurance company. You describe the circumstances. Maybe they send an adjuster out, and they say it’s not covered, or it’s covered but here’s the dollar amount that we’re obligated to pay you .” Most people do not have the expertise “to know whether or not that’s right.”
Most insurance company representatives will not comment on specific cases because of privacy requirements, but consider their claims processes both legal and effective. They will say, “Our customers and claimants receive prompt and courteous claim service and our goal is to settle each claim fairly and efficiently.” All insurance companies claim practices are available to and regularly reviewed by state departments of insurance. In Texas that agency is the Texas Department of Insurance.
Insurance experts argue that insurance regulation has become little more than a fig leaf. This is because state insurance departments are usually understaffed and overwhelmed. And even if the departments had the legal firepower to contend with the insurance giants, the regulators are closer to the industry than to consumers. Proof of this is that eleven of the past 15 presidents of the National Association of Insurance Commissioners (NAIC) went to work for the insurance industry after leaving office. A study in Georgia found that around half of state-level insurance commissioners did so as well. Studies from other states would be interesting.
Penalties for violations of state regulations are “laughably low” in many states. It usually takes an experienced Insurance Law Attorney to help individual claimants for the illegal acts of the insurance companies. Also, it is important to realize that insurance taxes are a major source of revenue for states, and insurance oversight commissions are usually more concerned with keeping companies solvent than in resolving the problems of policyholders.
With the exception of the federal Affordable Care Act, insurance is regulated on a state-by-state basis. Although most states set a specific timeline for how quickly an insurance company must initially respond to claims, there is much more leeway when it comes to settling those claims. These rules will vary state by state. In Texas, the rules regulating these timelines are found in the Texas Insurance Code, Prompt Payment of Claims Act. According to NAIC, claim delays have long been the most frequent cause of policyholder complaints. As of November 28, 2011, the NAIC had received 11,053 delay-related complaints this year alone, comprising almost a quarter of the year’s total complaints. These data only reflect confirmed complaints — the ones that the state insurance commission has investigated — so the actual number of delayed claims is likely much higher.

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