Injury Law Alert - Winter 2010/2011 Issue
Hemmings & Stevens, PLLC Law Firm of Raleigh, NC
THE THREE "D"s OF THE INSURANCE INDUSTRY: DELAY, DENY, DEFEND
U.S. insurance companies rake in billions of dollars in profits every year. How does the insurance industry make so much money? Unfortunately, many insurance companies - even the most well known and well respected - engage in dirty tricks and unethical behavior to boost their profits. Some of the most common tactics can be referred to as the three Ds: delay, deny, and defend.
The first D is delay. A claim is made and the demands begin: You need to fill out a form, you did not fill out the form correctly, you need to fill out another form, your claim is too late, your claim is not covered, back and forth, back and forth. Meanwhile, the benefits that the insurer is supposed to pay out remain in its pocket, inflating its profits.
The hope is that the more difficult the insurer makes it to collect and the longer the delay, the more likely it is that a person with a legitimate claim will give up and drop the claim.
Delay is an especially effective tactic with certain kinds of insurance (such as long term care insurance), where the insurer knows that the illness affecting the person making the claim adds yet another obstacle to overcome before the person can collect the payment that he or she is due.
Most people think that the job of an insurance company is to pay covered claims. Nothing could be further from the truth. In fact, insurance companies regularly refuse to pay claims that they know are covered, and many insurers actually reward the employees who pay the fewest claims and fire those who pay the most.
Claims are denied for any number of reasons: tenuous interpretations of policy language, willful misunderstanding of the facts, and even out and out fraud. In other cases, the insurer will "audit" the initial application for insurance and claim (often falsely) that it was not filled out properly or that the person did not disclose all of the facts he or she needed to disclose on the form, and then use this as an excuse to drop coverage entirely.
Denial of claims is effective because, as with delaying payment, many people do give up and drop the matter. Of course, every dollar not paid out on a claim is a dollar that goes to the insurer's bottom line.
Finally, there is the third D, defend. If all else fails, a person with a legitimate claim may have no choice but to force the insurer to defend itself in court. This all but ensures a delay of several more years while the issue is litigated, even more if the matter is appealed.
Some laws make it difficult to force an insurer to pay anything more than what should have been paid in the first place. This increases the incentive for the insurer to delay, deny, and defend.
So what is a person to do when up against an unethical insurance company? All too often there is only one answer: Get a lawyer.
HOW TO FIGHT BACK!
Although complicated and hard to understand, read the insurance policy. You may find that some of the things that you were promised when shopping for insurance actually aren't true.
Don't give an insurer a reason to deny your claim. Carefully read all of the forms that you have to fill out and provide all of the information requested.
Put all of your communications to the insurer in writing. If you do speak with someone on the telephone, follow up with a letter confirming what you were told.
Contact your state's department of insurance. It may be able to help you, but it will not represent you in a private matter.
Call our office. We will fight to get you everything you deserve.
Remember, the insurer is counting on you giving up. Hang in there!
DEBIT VERSUS CREDIT CARDS
When you are pulling out the plastic to make a purchase, will it be debit or credit? It makes sense to know how each works, and their respective advantages and disadvantages. The bottom line is that debit cards are fine for small and/or routine purchases, but credit cards, as a rule, are better for major purchases and online transactions because they offer more protections if something goes awry.
A debit card is like an electronic check - the consumer is spending money that he or she already has. As compared with credit cards, debit cards carry the potential for greater liability if the card is lost or stolen. Under federal law, liability is limited to $50 for the fast acting consumer who notifies the bank within two days after discovering an unauthorized transaction. After that, the cardholder could lose up to $500, or even more in some cases. On its own, a bank may choose to waive liability for unauthorized transactions if the consumer has taken reasonable precautions, but, of course, this varies depending on bank policies.
We help injured persons seeking compensation for their injuries. We represent individuals and small businesses with insurance claims that have been denied or other contract disputes. We DO NOT represent insurance companies or big business.