Insurance Company Tactics Really Bite July 29, 2009.

Many people who run across an insurance company that deals in bad faith and other tactics, wishes they’d never had to deal with the company in the first place.

It’s depressing, to say the least, to think that the insurance industry, one of the biggest money makers in the US with profits over $30 billion a year, have been known to stoop to engage in dishonest tactics and a flagrant lack of ethics to inflate their profits.

Given the tough economic times America faces currently, it’s not too much of a stretch of the imagination that those same insurance companies will jack up their rates even more and deny more claims. While this might be called a defensive position to support their bottom line, it certainly plays havoc with the industry as a whole. "Not only that, it seriously hampers consumers who ultimately suffer the consequences of denied insurance despite paying their contractual obligations monthly – meaning premiums," commented Christopher Mellino, a Cleveland, Ohio lawyer.

People might once have thought that the big name insurance company we all thought was the salt of the earth and had earned our family’s trust was above reproach. Nowadays people are finding out that the family friend has turned into Uncle Scrooge overnight and is not only denying reasonable claims for strange reasons, but is delaying payments, burying customers in insurance legal jargon and even refusing people retroactively who file claims. One might well ask, "What is wrong with this picture?"

"As horrendous as it may seem, there is evidence that those once friendly companies have gone out of their way to deny claims by actually offering rewards to employees who were successful in turning down claims, added Mellino. Workers who would not engage in that kind of behavior were fired. If denying claims didn’t work, some of these companies were not above perpetrating fraud to not pay claims.

While denying claims is bad enough, get ready for the worst stunt in the book – delaying claims until death. This has been done in instances by long-term care insurers whose rationale is simply this: if they don’t pay a claim they make money. Some of them have waited until an aged policyholder died to avoid paying. "This behavior is just the tip of the iceberg in an industry that is now also using credit reports to decide who gets insurance or not and how much they will pay," said Christopher Mellino, a Cleveland, Ohio lawyer. Brings to mind another good question: "When will it end?"