Insurance companies spend millions of dollars each year on advertising and marketing campaigns in an attempt to convince them that they care. Even the slogans used by these companies often suggest that you should consider them as friends, family, or neighbors. Regardless of what type of insurance you’re carrying, the company underwriting your policy wants you to believe that it has only your best interests at heart.
The problem is that this is all too often not the case. In fact, the average insurance company has a vested financial interest in doing everything that it can to pay as little as possible on any claim that you might make. To avoid that, you need to learn to recognize the most common insurance company tactics so that you can protect yourself in the event you ever need to file a claim.
The Scope of the Problem
Insurance customers routinely encounter problems with claims. Worse, these problems are encountered across pretty much every insurance niche market. The National Association of Insurance Commissioners tracks consumer complaints, and released a recent report that clearly shows that consumer complaints are distributed across a variety of insurance types.
In just the first two months of 2016, there were 11,813 consumer complaints related to automobile insurance nationwide. Another 5,625 complaints were lodged in relation to accident and health claims. 1,004 homeowners filed complaints regarding their home insurance, and nearly as many took issue with their life insurance policies.
The 2014 numbers for the State of Texas are just as alarming. In just that single year, there were a total of 1,133 auto insurance complaints leveled against various insurers. 285 consumers lodged formal complaints related to their homeowners’ insurance. In addition, 1,930 consumers filed complaints due to dissatisfaction with their accident and health insurance policies.
The specific complaints are just as diverse in nature:
- 6% of these claimants complained about the underwriting process.
- 75% complained about companies denying their claims.
- Another 11.01% were upset that their claims were unjustifiably delayed.
There appears to be good cause for these complaints, given that insurance companies routinely utilize a variety of tactics to minimize the amount of money they pay out in victim claims. Meanwhile, the industry itself continues to enjoy increased profits. In the first six months of 2015, the property and casualty insurance market alone enjoyed after-tax profits that were 19.2% higher than the same period in 2014. Meanwhile, the automobile industry is expected to see a 1.9% growth in revenue over the next five years, bringing in more than $200 billion.
The Tactics Insurers Use and How to Deal with Them
Obviously, if such a profitable industry is engendering such a high rate of complaints about its service, it is likely that certain specific tactics are being used to achieve insurer goals. Experts who have examined the industry have identified a number of these tactics. As a consumer, you should be aware of the different techniques that adjusters may use as they attempt to limit their liability and either negate or limit your claim payout:
- Adjusters seek recorded interviews. If you get a call from an insurance adjuster, chances are that he or she will ask to record the conversation. While this might seem harmless enough, it is actually part of a strategy designed to get you on record saying something that the insurer can later use to deny your claim. Remember, any recorded statement could end up as evidence in any necessary legal proceedings later in the process. Decline the interview and call an attorney first.
- Adjusters may try to convince you to sign broad medical releases. While they will present this as a necessary step in their effort to get you what you deserve, it is more likely that the company is simply probing for information in an attempt to tie any injury to a pre-existing condition. If there are medical issues involved, be sure that any release you sign covers only those medical visits related to the incident under consideration.
- Adjusters often want to have their own company doctors examine you for injuries. That can be a trap as well. The only way to be sure is to contact an attorney before you agree to such an examination.
- Adjusters sometimes fail to present settlement offers in written form. Remember, it will be all but impossible to enforce a verbal offer. Get everything in writing.
- Many adjusters will advise you to avoid contact with an attorney. Most often, they will claim that a lawyer will take a large portion of your settlement and that you can simply trust the insurer to deal with you fairly. In many instances, this is just part of a ploy to get you to settle for a smaller amount than that to which you are entitled. Contact an attorney and get a free consultation.
- Sometimes adjusters contact you quickly to obtain agreement for a quick settlement. While that might sound like a great deal, the reality is something different entirely. In many cases, this is done to get the case out of the way at minimum cost. And since any settlement requires you to sign a release that protects the company from additional claims, you would be wise to wait until you know the full extent and cost of any property or personal injury damage prior to signing anything.
- Adjusters might simply avoid you. Some companies try to frustrate claimants by avoiding contact with them. Others might continually “reassign” adjusters to slow the process. Delays seldom work out to your advantage, so always remain alert and ready for this tactic – and get a lawyer to help if necessary.
Unfortunately, these are just a few of the many common tactics that insurance companies use in their efforts to avoid honoring their contractual obligations to pay out on your policies. You should always be on the lookout for these techniques, and avoid speaking with any insurance company representative without first consulting with an attorney.