Insurance Companies Make Money By Not Paying Your Claim

We’ve all seen the television ads showing insurance agents meeting their policyholders at the seen of an auto accident at 3 a.m. and getting their claim paid the next day. While that actually may happen, the truth is that those situations are the exception and not rule – because insurance companies make money by not paying your claim.

Giving is not always better than receiving

While the sentiment of giving being better than receiving still rings true in a personal context, it’s the opposite when it comes to insurance. Policyholders give insurance companies billions of dollars every year in the form of premiums to protect them from a risk, yet many don’t receive anything when that risk materializes into an injury. Insurance companies are notorious for denying, delaying and refusing to pay valid claims – simply to keep those premiums and increase their bottom lines. Unfortunately, some of the largest insurance companies are the worst offenders.

Bad faith insurance tactics

Some of the nation’s biggest insurance companies—Allstate, AIG and State Farm (among others)—have denied valid claims in an attempt to boost their bottom lines, according to a recent American Association of Justice (AAJ) publication which said, “These companies have rewarded employees who successfully denied claims, replaced employees who would not, and when all else failed, engaged in outright fraud to avoid paying claims.” In fact, the report says that long term care insurance companies are some of the worst offenders when it comes to bad faith tactics and quoted one regulator as saying, “[T]he bottom line is that insurance companies make money when they don’t pay claims…They’ll do anything to avoid paying, because if they wait long enough, they know the policyholders will die.”

If your insurance company has denied your valid claim, contact an experienced bad faith insurance law attorney to discuss your situation. Consultations are free of charge, without obligation and are strictly confidential.

Case Studies: Insurance Companies and Claim Denials

Case Study 1: The Denied Auto Accident Claim

In this case, John Smith was involved in a severe auto accident caused by another driver. John promptly filed a claim with his insurance company, expecting swift compensation for his medical expenses and vehicle repairs. However, the insurance company denied his claim, citing technicalities and ambiguous policy language. John was left struggling to cover his expenses and seek justice.

Case Study 2: Long-Term Care Insurance Deception

Elderly couple Robert and Margaret had diligently paid their long-term care insurance premiums for years. When Margaret’s health deteriorated, they submitted a claim to cover her medical expenses and necessary care. Shockingly, their insurance company denied the claim, alleging that Margaret’s condition was a pre-existing illness. Facing an battle against the insurance company’s bad faith practices.

Case Study 3: Deliberate Delay of Home Insurance Claim

After a major fire destroyed their home, Sarah and David filed a claim with their home insurance company. Despite providing all required documentation, the insurance company deliberately prolonged the claim process, requesting repetitive paperwork and unnecessary investigations. Months passed, and Sarah and David found themselves without a home or the means to rebuild.