Insurance Company Tactics

“What the insurance companies have done is to reverse the business so that the public at large insures the insurance companies.”

—Legendary Trial Lawyer, Gerry Spence, American Trial Lawyer Hall of Fame

Gerry Spence has never lost a criminal case either as a prosecutor or a defense attorney, and has not lost a civil case since 1969.

In our estimation, the biggest risk you face in attempting to recover damages is to trust the insurance company to pay you the full amount of everything you may potentially be owed.

Most insurance companies are for-profit businesses – their profit. That is not wrong – it’s just business. Insurance companies are so profitable, in fact, that in 2016, the insurance industry’s assets ($5.8 trillion) totaled more than the GDPs of all but two countries in the world – the United States and China!

The less they pay you, the more they keep. But what some people may not realize is the tactics some insurance companies may use to try to “spin” the facts in their favor so they can keep more of the compensation you may be owed.

Truth be known, insurance claims reps, investigators, adjusters, and many others in that business are expertly trained and highly skilled at finding ways to keep your money. We know firsthand. Several of our employees are former insurance company employees.

The American Association for Justice (AAJ) agrees. The AAJ is the national association of plaintiffs’ trial lawyers whose mission is to promote a fair and effective justice system. It supports attorneys in their efforts to ensure that any person who is injured by the misconduct or negligence of others can obtain justice in America’s courtrooms, even when taking on the most powerful interests – like insurance companies.

We encourage you to click here to read “Tricks of the Trade: How Insurance Companies Deny, Delay, Confuse and Refuse.” It’s a short read that outlines the AAJ’s perspective on how some insurance companies operate to keep as much of your compensation as they can. It illuminates many of their devious tactics and truly bad behavior most people don’t know about.

Here is the introduction, which at the very least, we think you should read.

Warning. What you will learn is likely to shock you.

“Tricks of the Trade: How Insurance Companies Deny, Delay, Confuse and Refuse”

Executive Summary
The U.S. insurance industry has trillions of dollars in assets, enjoys average profits of over $30 billion a year, and pays its CEOs more than any other industry1. But insurance companies still engage in dirty tricks and unethical behavior to boost their bottom line even further.

The current economic turmoil affecting the insurance industry on Wall Street has only made the outlook bleaker for consumers living on Main Street. Insurance companies are likely to demand huge rate hikes and refuse more claims than ever.

Some of America’s most well-known insurance companies—the same ones that spend billions on advertising to earn your trust—have endeavored to deny claims, delay payments, confuse consumers with incomprehensible insurance-speak, and retroactively refuse anyone who may cost them money.

This report describes some of the most egregious ways the insurance industry attempts to make money at the expense of consumers. These are some of the tricks of the trade:

Denying Claims
Some of the nation’s biggest insurance companies— Allstate, AIG, and State Farm among others—have denied valid claims in an attempt to boost their bottom lines. These companies have rewarded employees who successfully denied claims, replaced employees who would not, and when all else failed, engaged in outright fraud to avoid paying claims.

Delaying Until Death
Many insurance companies routinely delay claims, knowing full well that many policyholders will simply give up. Some have gone so far as to lock paperwork away in safes2. Undoubtedly, the most shameful use of delay tactics has been by long-term care insurers, who often take advantage of their policyholders’ age and ill health. In the words of one regulator, “the bottom line is that insurance companies make money when they don’t pay claims…They’ll do anything to avoid paying, because if they wait long enough, they know the policyholders will die3.”

Confusing Consumers
Insurance contracts are some of the most dense and incomprehensible contracts a consumer is ever likely to see4. More than half of all states have enacted “plain English” laws for consumer contracts, yet many Americans still do not fully understand the risks they are subject to5. After Hurricane Katrina, insurance companies used obscure “anti-concurrent” clauses to get out of paying claims. Consumers who purchased hurricane insurance and thought they were covered suddenly found the coverage eliminated by an obscure clause they could not hope to understand.

Discriminating by Credit Score
Increasingly, insurance companies are using credit reports to dictate the premiums consumers pay, or whether they can even get insurance in the first place. The practice penalizes the poor, senior citizens with little credit, and those who have suffered financial crisis through no fault of their own. Insurance companies have denied fiscally responsible people who paid their bills in cash, but refused renewals because of a lack of credit history. Others have seen auto rate hikes near 600 percent despite clean driving records after falling on economic troubles.

Abandoning the Sick
Health insurers looking to cut costs have taken to canceling retroactively, or rescinding, the policies of people whose conditions have become expensive to treat. Some insurance companies have even offered bonuses to employees who meet “cancellation goals.” Rescission targets patients in the midst of treatment when they are at their most vulnerable—even cancer patients in the midst of chemotherapy have been targeted.

Canceling for a Call
Many people are rightly reluctant to make small claims on their home insurance for fear their insurance company will raise their premiums. But few realize that insurance companies often refuse to renew a policy because the policyholder did as little as inquire about the possibility of making a claim. Many times an insurance company will count an inquiry over the phone as the same as a claim, and then they will do everything in their power to drop the policyholder.

—End of introduction to: “Tricks of the Trade: How Insurance Companies Deny, Delay, Confuse and Refuse”

Free Booklet About Our Experience with Insurance Bad Behavior

We have seen so much bad behavior from some insurance companies, we produced our own booklet outlining actual clients’ stories entitled Insurance Companies (and others) Behaving Badly. Click here to download your free copy.

We hope this information is helpful to you as you embark on your journey for compensation. Like any endeavor, you’ll want to know the full extent of the facts and the potential situations you may face.

Experienced North Carolina Personal Injury Lawyers

Insurance is there to help you when you need it. While there are good and caring people in the insurance industry, there are also those who may not be working for you. It is for these reasons, among others, that we highly recommend you obtain experienced legal help when trying to obtain the full extent of all the compensation you potentially deserve.

Before you speak to an insurance representative about your claim, contact us or call 1-866-900-7078 for a free case evaluation.

Footnotes to “Tricks of the Trade: How Insurance Companies Deny, Delay, Confuse and Refuse.”

1. The insurance industry’s assets total $3.8 trillion, more than the GDPs of all but two countries in the world (United States and Japan), “Insurers as Investors,” Insurance Information Institute,; over the last 10 years the property casualty industry has averaged profits of over $30 billion a year, and the life and health insurance industry has averaged another $30 billion, “Industry Financials and Outlook,” Insurance Information Institute (III),, “Life Insurance,” Insurance Information Institute (III),; the CEOs of the top 10 property casualty firms earned an average $8.9 million in 2007, while CEOs at the top 10 life and health insurers earned an average $9.1 million, and CEOs across the industry lead all industries with a median cash compensation of $1.6 million, “CEOs Rake in Cash but not Stock,” National Underwriter, January 2, 2008.

2. Dean Starkman, “AIG’s Other Reputation,”Washington Post, August 21, 2005; Carl T. Hall, “Big Insurer is Tough on Claims,” San Francisco Chronicle, July 30, 1990.

3. Charles Duhigg, “Aged, Frail and Denied Care by their Insurers,” The New York Times, March 26, 2007.

4. Michelle E. Boardman, “Contra Proferentem: The Allure of Ambiguous Boilerplate,” Michigan Law Review, Vol. 104:1105, March 2006.

5. David Rossmiller, “Plainly Ambiguous: Have Plain English Laws Made Insurance Policies Less Ambiguous?” Oregon Association of Defense Counsel, Spring 2008.