Simply refuse to pay the bills that you legally and morally owe, and keep all the money for yourself. That’s a very profitable business for any company or industry that can get away with it. A company that can use that strategy and stay in business is sure to increase its profits dramatically, and that’s exactly what some of the biggest insurance companies in the country have been doing since the mid 1990s.A report from CNN detailed the results of an extensive 18-month investigation that the network conducted. That study found that many insurance companies make a policy of refusing to honor their obligations. It’s a practice that happens with claims of all kinds, and it’s very common in automobile accidents that cause soft tissue damage, which is a form of personal injury that can be very difficult to identify. Soft tissue damage may leave a woman unable to use her arm, but the damage won’t show up on an x-ray.
In the CNN report, Jeff Stempel, an insurance law professor at the University of Nevada, said, “We can see that policyholders individually are getting hurt by being dragged through the court on fender-bender claims, and yet we don’t see any collateral benefit in the form of reduced premiums even for the other policyholders. So I think now we can say to continue this kind of program is, in my view, institutionalized bad faith.”
“Insurance bad faith” is the legal term used to describe the actions of insurance companies that either refuse to pay their claims or make it very difficult for victims to collect fair recoveries. The practice of Bad Faith is so common that an organization called Fight Bad Faith Insurance Companies (FBIC) details the actions of unscrupulous insurance companies and tries to help their victims.
The CNN report said that State Farm and Allstate, the nation’s two largest insurance companies, are two of the worst offenders. On its Hall of Shame, FBIC ranks State Farm #2 and Allstate #3, and FBIC gives both companies a Do Not Buy recommendation. FBIC only ranked The Hartford as a worse company than State Farm and Allstate.
For these companies, acting in bad faith is not simply a practice that has evolved over time. Instead, it’s a policy that the companies have instituted in a very organized and very successful attempt to increase their profits. They hired a consulting company named McKinsey and Company. McKinsey advised Allstate to “put on boxing gloves” while it continued with its fraudulent “Good Hands” advertising campaigns.
The result has been huge profits for the insurance companies and great frustration for victims of personal injuries and the families of victims of wrongful deaths. Because of their employers’ unethical behavior, many employees who could not check their morals at the door every morning have left the insurance companies and spoken out about the practices that they left behind.
One former Allstate claims adjuster said that the company told employees to get rid of claims quickly and cheaply and even offered some accident victims as little as $50, telling them to take it or leave it. Another said that the strategy consisted of 3 D’s — denying a claim, delaying settlement of the claim, and defending against the claim in court.
The our law firm’s experience in insurance bad faith cases has proven to us that many insurance companies are even more determined not to pay their bigger bills than they are to shirk their obligations for fender benders. However, in many cases of severe personal injuries, we have been able to collect much, much larger awards for our clients than the insurance companies would have had to pay if they had honored their contracts and paid the limits of the policies, instead of acting in violation of the law.
For example, because of the negligence of a driver making an illegal u-turn, George Liu became a paraplegic. The bad driver’s insurance company refused to pay its $30,000 liability policy to settle his claim. We collected $4.5 million for him after three days of trial.
When a 75 year-old woman was walking toward the elementary school where she volunteered, a speeding driver hit her and caused horrific injuries. The driver’s insurance company could easily have settled its obligations for the $100,000 policy limit but simply refused to pay. Our client recovered $2.65 million on the eve of trial.
And there are many more cases. See www.alexanderinjury.com for additional details.
Personal injury victims don’t deserve to become Insurance Bad Faith victims as well. Unfortunately, insurance companies are showing no signs that they’re going to stop acting in bad faith, so legal action is often the only way to get them to honor their contracts.
If an insurance company is acting in bad faith toward you or a loved one, put one of the Insurance Bad Faith attorneys or personal injury attorneys in our office to work for you.
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Onward,
Richard Alexander
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