Millions Paid Only After Complaints Are Filed
An old eastern proverb claims that one can't feed a child until he or she cries out for food. As controversial as this concept is, recent data released by the Texas Department of Insurance shows that some of the nation's leading insurance companies may be regularly operating by this principle. While it is no secret that insurance companies tend to put up a fight when their customers turn to them for claims, KXAN in Austin investigated whether this practice has finally gone too far.
The bottom line of the investigation centers on the discovery that insurance companies pay millions to consumers for claims every year, but only after the consumer is initially denied his or her claim and decides to file a complaint . Information gained from the Texas Department of Insurance and compiled by Brian Collister of KXAN Investigates showed that in 2013, insurance companies paid consumers more than $27 million after being forced to do so by the state.
These pay outs occurred after initial refusal of the consumers' original claims—which the TDI seems to have found to be legitimate.
Thousands of individuals that have suffered personal or financial loss in recent years are familiar with this scenario, having been forced to file a legal complaint with the TDI in order to recover from an otherwise legitimate claim. One story given as an example involves an accident where a driver drove through a red light and hit the victim's car. While this sounds like a straightforward scenario, the victim found himself in a difficult battle with the at-fault insurance company simply trying to recover compensation for his lost wages, medical bills and property damage. This simple anecdote fogs the credibility of The Insurance Council of Texas, when one spokesman claimed that "it's a complex matter…it's not black or white."
Are Industry Leaders Also Leading the Trend?
Modern advertisements allow industry leaders to paint a pleasant, peaceful picture of life under their care and insurance. However, KXAN found that it is the industry leaders heading this disturbing trend. Examining data from 2009 to 2013, State Farm Insurance leads with the biggest infraction in the fields of both auto (State Farm Mutual Auto) and home (Lloyd) insurance, paying back a combined $11 million in nearly 1,200 complaints. Other offenders suspected of bad faith practices include:
- United Healthcare – Paying back $7,280,950.49 in 1,518 complaints
- American General – Paying back $2.7 million in 39 complaints
- AETNA Life Insurance – Paying back $5,674,060.05 in 480 complaints
- Blue Cross / Blue Shield of Texas, Healthcare Division – Paying back $5,357,981.04 in 1,103 complaints
The full findings from the TDI can be found on KXAN Austin's website.
Denying It's Broken & Refusing to Fix It
Unfortunately, the insurance industry has become so large and influential that speculations can only be addressed with diplomacy. Even in light of the TDI data, the Insurance Council of Texas chalks up the findings to a "lack of communication" and the inability to find agreement.
It seems as though they have completely missed the point.
At the end of the day, any type of insurance is intended to provide consumers with security for finances and for provision in the event of an unforeseen and uncontrollable tragedy. If there is a profit motive driving insurance companies to this point, it must be stopped—whether it is to be by policy reform or behavior modification is yet to be determined. However, at Arnold & Itkin LLP, we seek that change one case at a time. By providing our clients with aggressive, intelligent and unwavering determination to win a fair award, our team seeks to halt any unfair practices on the part of insurance companies seeking an easy way out. From car accidents to catastrophic offshore events, we have been there standing up for the rights of the claimants and pushing for the integrity and fairness of the insurance industry.
We look to make a difference for the better—if not in the industry as a whole, then at least in the individual lives of the people we represent.