Make Your Insurance Company Pay

Denied - Underpayment - Harassment
The story is a common one. A house catches fire and the insurance company refuses to pay the claim or offers payment of less than 40% of the cost to repair the damage. The policyholder tells the company about the new flat screen TV in the family room but she no longer has her receipt...since it burned in the fire. Does she wait to repair the damage while fighting with the insurance company or does she give in and agree to sign a settlement for a lower value just so she can move on with her life?
Our need to resolve losses and move on with our lives equals big profits at insurance companies.
What do you do when you insurance company refuses to pay or delays paying a claim...be it auto, home, business or an accident involving your property?
The same question applies when an insurance company pays only a portion of a claim or deliberately undervalues a claim.
When unnecessary delays, undervaluing of claims occurs deliberately or a policyholder is rushed to settlement of a claim, it is called "bad faith."
In all states, an insurance company is obliged to act with the best interest of the client or policyholder. It does not matter whether you live in Texas or Maine. The legal obligations of an insurance company remain the same. The laws governing specifically when and how such matters are resolved in the courts can vary from state to state. However, the basic tenet governing how an insurance company must operate remains static.
When an insurance company fails to act in a fair and honest way toward its policyholders or is dishonest in any way, "bad faith" is said to have occurred.
Situations in which bad faith can occur vary widely, including auto insurance, life insurance, disability insurance, homeowners insurance, medical malpractice insurance, etc.
Examples of insurance bad faith include but are not limited to:
Delaying payment of claims for an unreasonable length of time
Denying coverage
Denying payment on claims
Failure to investigate a claim in a reasonable manner
Withholding benefits without cause
Underpayment of claims
Undervaluing claims
Unfairly refusing to settle or reimburse claims
Abusive behavior toward policyholders or unreasonable claims processes
Cancellation of insurance policy unjustly
Anyone can bring a civil action against an insurance company when the individual suffers damage due to an insurance company's behavior. Such claims can be brought against companies for auto, home, business, professional liability, health, life, disability, and other types of insurance.
Health insurance can be a little tricky in that employer provided insurance is limited by Federal laws known as ERISA, the Employment Retirement Income Security Act. In other words, if you get your health insurance through your employer and a claim is denied, your ability to sue that insurance company may be limited. The laws in this area are in a state of constant change so do not assume you cannot sue. Talk to an attorney first.
How does it work?
Insurance companies employ entire departments of people called actuaries. One definition of an insurance actuarial is "An Actuary is responsible for analyzing the possible outcomes of the types of events that could potentially cause policyholders to make claims against their insurance policies." That about says it all.
It is the job of actuarials to also weigh the likelihood litigation will take place in the case of a loss, the likelihood a policyholder will seek and obtain competent legal counsel, pursue a claim, etc. This is referred to as "risk management," and while these people do not make decisions regarding claims, they do provide the decision makers in insurance companies with the "odds."
On the face of it, forcing a policyholder to pursue litigation can make sound economic sense. If the claim is $50,000, the policyholder is going to have to spend a great deal of time getting their money. So, the claim gets lost, delayed, is undervalued all in a ruse to frustrate the policyholder and drive them to agree to settle for an amount much less than the actual value. It works all too often.
Payment of claims, however, is by no means an easy business. Insurance policies are complex and few policyholders carefully review their policies to assess the exclusions, omissions, etc. prior to filing a claim.
On the other hand, lawsuits have proven that ssome of the nation's biggest insurance companies have denied valid claims in an attempt to boost their bottom lines. These companies have even rewarded employees who would not pay claims, and when all else failed, engaged in outright fraud to avoid paying claims.
Stall. Delay. Fill out more forms. Wait them out!!!
Legal case histories are full of insurance companies routinely delaying claims, knowing full well that many policyholders will simply give up. Some have gone as far as to lock paperwork away in safes. Undoubtedly, the most shameful use of delay tactics has been by long-term care insurers, who often take advantage of their policyholders' age and ill health.
In the words of one regulator, "the 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."
Get Qualified Help!
If you or someone you know is battling with an insurance company over a claim, the best course of action is to find an attorney in your area with trial experience in insurance bad faith. This specialty is unlike all others. It is critical that you ask how many actual insurance bad faith trials the attorney has participated in to assess their experience level. If the number is low, keep looking.
It is easy to claim experience and another thing entirely to have built a career fighting insurance bad faith.
The best free and accurate source of finding an insurance bad faith attorney in your area is at . Attorneys are listed in this industry specific directory by specialty and the directory will provide vital information such as years in practice, professional credentials, etc. Martindale Hubbell is considered the legal bible.
Finally, remember that not all insurance companies are out to refuse payment of claims. Mistakes do occur that derail claims, human errors can lead to inappropriate findings. If, however, you have made your best effort to resolve your claims with an insurance company and the result remains unsatisfactory, seek the advice of a qualified insurance bad faith attorney.
Bruce E. Sulzner is a San Diego-based trial attorney with more than 30 years experience in insurance bad faith, personal liability and medical malpractice defense. For more information, please contact: Bruce E. Sulzner, 619-238-8550.