Anyone who thinks the insurance companies are looking out for consumers needs to read the American Association of Justice’s report Pattern of Greed, which my colleague Grace Kanoy blogged about last week.
The American Association of Justice report examines tactics that insurance companies used in denying claims after Hurricane Katrina.
Insurance companies has a systemic policy of denying claims. Workers’ compensation attorneys see examples of this every day. And the Pattern of Greed report, as well as an investigation by CNN on car insurance and injury claims, prove that it’s standard operating procedure to deny claims. These are VALID claims, but the insurance companies make it a habit of saying NO, forcing consumers into protracted and expensive battles to get their claims paid.
In the case of Hurricane Katrina, the insurance companies:
- attempted to shift blame for the $135 billion in storm damage to flooding, which is not covered by most insurance policies, when in fact wind accounted for the vast majority of home losses and damage.
- used misleading statistics to convince the media and through them the general public that losses weren’t as significant as they truly are.
- Attempting to influence engineering firms and others involved in evaluating damage from Katrina and the causes of it.
- Underestimated the value of damage
- Misled policyholders into their waiving rights
- Dropped or weakened policies after pay-outs
The insurance industry also has a history of poor-mouthing, claiming financial losses when, in fact, statistics show that insurance is a robust and very profitable business.
Through its advertising efforts, the insurance industry has positioned itself as a savior, the consumer’s best friend in a crisis. But the opposite is true. The insurance industry consistently takes advantage of people in need and mistreats them. Insurance companies are no friend to injured workers, to car accident victims or to homeowners who have suffered catastrophic damage.