Insurers Cheat Policyholders While Increasing Profits
You would like to think that, after all the money that has been paid in the form of insurance premiums, you could count on your insurance company to cover your property damage losses, should disaster strike. As more and more people are finding out, big insurance companies are paying less than ever for settlements while they report record profits.
Property Damage Attorneys at Arguello, Hope & Associates
People Are Complaining
Insurance companies are repeatedly being challenged for paying less than the policy promises. Thousands of complaints have been filed with state insurance departments and civil court cases citing insurers paying 30-60 percent of the cost of replacing or rebuilding a damaged home. This often happens even after carriers promise homeowners they are fully covered.
Court records show that property insurers have denied or greatly reduced the recovery amounts in policyholder’s claims in several states. Insurance companies often develop their own reimbursement amounts through the use of proprietary software programs.
By paying out less in settlement claims, insurance companies have enjoyed record profits over the last decade. Telling, is the fact that this period includes the Hurricane Katrina, the worst natural disaster in the history of the U.S.
Focus on Profit, Not People
Robert Hunter, current insurance director at the Consumer Federation of America, and formerly the Texas insurance commissioner, states that “Money managers have taken over this whole industry, their eyes are not on people who are hurt, but on the bottom line for the next quarter.”
California Lieutenant Governor John Garamendi imposed over $18 million in fines against insurance carriers from 2002-2006 for their mistreatment of clients. Garamendi states that “…the industry’s drive for profit has overwhelmed its obligation to policyholders.”
Insurance Claim Attorneys at Arguello, Hope & Associates
Low-Ball Offers Force People To Fight
The way insurance companies are working now is by offering a low settlement amount – a low-ball offer. If the client accepts, the insurance company wins. If the client refuses, the insurance company challenges you to fight them. Often times, they will use tactics such as intimidation or stalling in an attempt to sway people to just give up their fight.
Source: Bloomberg News
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