Posts Tagged ‘ Bad Faith Insurance ’

Allstate Insurance Inspires Song – You’re Not in Good Hands

October 8th, 2010. By AbiK

I love our readers at LawyersAndSettlements.com—there’s just no stopping the creativity and passion everyone exhibits when faced with a cause that’s near and dear to their hearts. The above video is from reader Layla Fanucci—it’s about Allstate Insurance.

Now, I don’t really know the full story here on what inspired Layla to go and pen this song—but clearly she’s less than charmed with Allstate. Suffice to say, it’s not the first time we’ve heard Allstate complaints or seen Allstate bad faith insurance lawsuits—and Allstate is certainly not the only insurance company that’s had a litany of bad faith insurance claims against it.

But the fact that she actually sat down, wrote lyrics about Allstate, recorded her song and then posted it pretty much sums up how much Allstate’s gotten under her skin.

If you’ve got a video—or know someone who does—about a legal issue that’s been on your mind, send it in! We’d love to see it, and may even post it to our site…

Tags: Allstate, Bad Faith Insurance, Layla Fanucci
Posted in Insurance | 8 Comments »

What’s the “Bad” in Bad Faith Insurance?

September 7th, 2010. By Kristine B

You’ve probably seen the commercials on tv: an actor—say Dennis Haysbert—walks around talking about how “his” insurance company (that would be Allstate) is his best friend…how it has his back in a bad situation…how it has bent over backwards to help him in his time of need…and, damn if he doesn’t sound so sincere! Or you’ve seen Flo–the Progressive Insurance girl–making it sound like no way no how would Progressive ever—EVER!—give you a lousy rate. No siree—Flo ensures us that buying insurance is as easy as ordering a Whopper with cheese, hold the pickles—thanks.

But, when it comes time to file an actual claim—when a real person needs real help from a real insurance company, all of a sudden it seems like there are a million reasons why the company won’t pay out a claim. Sometimes, that leads to claims of bad faith insurance—today’s Pleading Ignorance topic.

Before we get to that, though, the obligatory “not every denied claim is a legitimate claim” spiel. It’s true that insurance companies have to protect themselves from fraudsters and people out to make a quick buck off an accident. There are people who see an accident—real or faked—as a way to make easy money. This, of course, puts the honest people at a disadvantage. Why? Because they’re dealing with insurance companies that a) want to make as much profit as possible and b) have to unfortunately protect themselves from fraudsters who see the insurance companies as personal ATM’s.

The mix of profitability and self-protection can lead to claims of bad faith insurance.

So, what is bad faith insurance? You’ve probably heard of it before, because the companies that are accused of practicing it are often large insurance corporations—so it gets airtime in the news. Bad faith insurance occurs when an insurance company denies legitimate claims for illegitimate reasons.

Here’s the thing: When you buy an insurance policy to protect yourself or your family and you pay into it faithfully, with the full expectation that if you should ever need it, the policy will cover you, the insurance companies are required, by law, to pay out your legitimate claims.

Of course, it all looks good on paper—just like that insurance policy!—but when it comes down to it, some insurance companies use all sorts of tactics to avoid paying claims.

They might stall on the claim by forcing you to send in excessive amounts of paperwork—or they may claim to have found “mistakes” in the paperwork you’ve sent in. By stalling, they may push back the time your claim is received so that your claim is no longer valid. They might retroactively cancel your insurance policy—in effect waiting until you make a claim then deciding you shouldn’t have had the policy to begin with. They might find their own medical examiners who overrule your own doctor’s diagnosis. They might reclassify your illness or your claim and state that you should be able to work when you really cannot. Or they may classify a seemingly standard lab test as outpatient surgery requiring precertification that, of course, you did not get. The list of possibilities is endless.

Some insurance companies might target specific claims for denial; these claims might include anyone who claims Fibromyalgia or Chronic Fatigue Syndrome. People making those claims might automatically have their claims denied or may be required to send in additional paperwork to support their claim.

The bottom line is that “bad faith insurance” occurs any time that a legitmate claim that you’ve paid insurance premiums to be covered for is denied or delayed without sound reason. And, if you’ve found yourself in that position and have gone through the proper channels of contacting the insurance company and requesting that your claim be reprocessed or you’ve filed an appeal with the insurer to no avail, you may want to get some legal help.

Tags: Bad Faith Insurance, Denied Insurance, Insurance, Pleading Ignorance
Posted in Insurance, Pleading Ignorance | 2 Comments »

Bad Faith Insurance Companies in Denial

September 8th, 2009. By janem

Last month Michigan voted to pass legislation that will keep them up to speed with 46 other states regarding bad faith insurance practices. Consumers will be protected from unfair and abusive insurance company practices by creating penalties for insurance companies that deny policyholders’ rightful claims, while holding CEOs and other corporate leaders accountable for boosting profits at the expense of consumers.

badfaith

The plan is twofold: to protect consumers and whistleblowers–the insiders who can’t sleep at night knowing the companies they work for deny or delay legitimate insurance claims so that the company’s profits increase. According to Bloomberg News, whistleblower Jo Anne Katzman, a former claims adjuster with Allstate Insurance Company, said managers regularly threatened adjusters–they would lose their jobs if they didn’t deny enough claims. She also was ordered not to pay a claim she knew was valid. As well, both Farmers Insurance and Allstate have employee incentive programs for adjusters who deny the most claims!

Naturally, insurance companies and their lobbying and public relations firms deny, deny. They launched radio attacks and automated phone calls against Michigan’s legislators who are trying to protect their residents against bad faith and wrongful denial insurance.

And bad faith bills have been introduced in 14 states and Washington, D.C., this year.

The National Association of Mutual Insurance Companies applauded the non-profit American Legislative Exchange Council (ALEC) when it adopted a resolution in opposition to insurance bad faith legislation. So smart ALEC (sorry, couldn’t help myself) retaliated by going on about the advancement of free market, limited government principles and plans to conduct a policy making program uniting members of the public and private sector, according to their website.

And here’s the doozy: Paul Tetrault, NAMIC state affairs manager and a member of ALEC’s Civil Justice Task Force, said in a statement that while bad faith bills are typically described in “favorable terms” by sponsors, the resolution recognizes that such bills hurt consumers through increasing costs ultimately borne by policyholders… The resolution also stresses the way in which the threat of excessive bad faith liability can interfere with the proper functioning of the claims settlement process, hindering insurers’ ability to detect fraud, which can result in payment of meritless claims.”

Try telling that to the hundreds of thousands of people who have been denied legitimate claims. Here are just a few cases that are considered bad faith insurance and practiced regularly by many insurance companies:

The insurance company does not investigate a claim in a prompt and timely manner.
A settlement is not offered within a reasonable amount of time once the investigation is complete.
A delay in any payments concerning a settlement.
The insurance carrier has not informed you of additional benefits.
Any type of fraud or harassment during the investigation on the part of the insurance company.
Concealing any facts from the insured is cause for insurance bad faith.
Not following the regular procedures within the claims manual.
Altering any form of the insurance policy without the knowledge of the insured.
Threaten not to pay unless the insured conforms.
Failure to evaluate damages within a reasonable amount of time.

As consumers, we must oppose bills like the one ALEC has proposed.

Tags: Bad Faith Insurance
Posted in Emerging Issues | No Comments »