If Your Insurance Company Won’t Pay – How Insurers Cheat Policyholders
Although insurance companies have a fiduciary duty toward policyholders, many insurance companies routinely violate this obligation and cheat their customers. The tactics used by insurance companies range from denying valid claims tooffering ludicrously lowball settlements or otherwise employing tactics designed to delay andfrustrate policyholders until they finally accept less than the value of their claim. A person who has lost his or her home to a fire or has been involved in a serious motor vehicle accident is under extreme stress and financial pressure. Many insurance companies not only are aware of the difficulties faced by those who suffer personal injuries or financial loss but exploit these pressures to increase profits by radically underpaying claims.
Our Oklahoma insurance bad faith attorneys represent insurance policyholders throughout Oklahoma who are the victims of unfair, aggressive or deceptive practices by their insurer. Our experienced bad faith insurance attorneys are intimately familiar with the unethical tactics often employed by insurance companies to deny policyholders the full value of their claims. We have provided an overview of some of the practices that are most often used to deny or reduce the value of claims to policyholders.
- Delay Delay Delay: The longer that an insurance company can drag out the process of paying a claim, the better the chance that the policyholder will accept less than the genuine value of the claim. Insurance companies know that a policyholder whose home has been destroyed in a fire or who is in a hospital recovering from injuries incurred in a car accident is under extreme financial pressure resulting from factors like lost income, medical expenses and the need to make repairs to avoid further property damage. The longer the insurer can delay paying the claim the more financial pressure can be applied so that a policyholder accepts less than the reasonable value of his or her claim. The insurer continues to use the funds for investment purposes so the delay itself actually results in profit for the insurance company.
- Changing the Terms of the Policy: Many policyholders who purchase insurance that provides “full replacement value” receive an unpleasant surprise when they submit a claim following damage to their roof or the complete destruction of their home. Insurance companies often change the terms of the policy without an insured receiving notice or agreeing to the change. Sometimes the insurer will claim they sent a letter notifying the policyholder of the unilateral change. These notices conveniently never reach the policyholder who continues to faithfully make premium payments. When the insurance company changes a policy so that it no longer provides full replacement coverage, the policyholder may need to take out a loan just to have their home rebuilt.
- Quickly Offering Far Less than the Value of a Claim: Once a claim is received by the insurance company, it will often offer a quick settlement for far less than the actual value of the claim. The insurer relies on the stress and financial pressure accompanying a loss or accident to motivate a policyholder to simply accept the amount offered. This quick lowball settlement strategy is designed to take advantage of the fact that an insured may not have a realistic idea regarding the extent of his or her injuries, property damage or the value of the claim. If the insurance company can induce a policyholder to settle quickly before the insured has had a chance to get legal advice, consult an independent adjuster or complete medical treatment, the insurance company can leverage a policyholder’s lack of information. Any policyholder who accepts what the insurance company initially offers receives less than the claims actual value. Estimates suggest that as many as 40% of payouts are for less than the value of the claim.
- Using Technology to Minimize Claims: Many insurance company use estimating software that radically undervalues claims. These programs are easily manipulated and based on unrealistic costs or other bad assumptions that result in settlement amounts that are not a genuine reflection of loss. This practice is routinely used to permit insurance companies to pay less than the market value of homes that are destroyed or damaged.
- Ignoring Engineering Reports or Lying to Policyholders: Insurance companies frequently pressure experts to change unfavorable conclusions in engineering reports or blatantly lie to policyholders about the results of their investigation.
These examples are just a few of the ways that insurance companies cheat their policyholders. An insurance company that does not honor its obligations can mean unpaid medical expenses, the inability to rebuild or repair one’s home and/or pain and suffering that is not compensated. When an insurance company treats its policyholders unfairly by engaging in practices like these,it violates its covenant of good faith and fair dealing toward its insured.
If your insurance company unreasonably denies your claim, engages in unethical tactics designed to stall payment or offers less than the value of your claim, our experienced Oklahoma bad faith attorneys can help you obtain the compensation that you deserve. We believe that insurance companies that cheat their policyholders should pay for their unfair and unethical practices. We represent clients throughout Oklahoma who are the victims of bad faith practices by their insurance company. We are experienced with such tactics and may be able to file a lawsuit for bad faith if your insurance company refuses to treat you fairly.
Feel free to schedule a free consultation online or call The Bennett & David L. Smith Law Firms at 405.272.0303 or 405.528.5520 to discuss your legal options with an experienced Oklahoma City lawyer today. No Recovery, No Fee! We will meet with you face to face and can handle cases anywhere in Oklahoma. We can even come to you!