The U.S. insurance industry has trillions of dollars in assets, enjoys average profits of over $30 billion a year, and pays its CEO's more than any other industry. But insurance companies still engage in dirty tricks and unethical behavior to boost their bottom lines even further.
Some of the most recognized insurance companies, the same ones that spend billions on advertising just like oil giant BP does in its industry, trying to earn your trust, have worked out methods to deny claims, delay payments, confuse consumers with incomprehensible language, and retroactively refuse anyone who may cost them money. Some of the nation's largest insurance companies, including one that received a huge government bailout, have denied valid claims in an attempt to boost their bottom lines. These companies have rewarded their employees who successfully denied claims, replaced employees who would not, and when all else failed, engaged in outright fraud to avoid paying claims.
Many insurance companies routinely delay claims, knowing full well that many policy holders will simply give up trying to get payments that they deserve under the policies they paid for. Some have gone so far as to lock paperwork away in safes. 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. One regulator, who spoke plainly, said, "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 die."
Insurance contracts are some of the most dense and incomprehensible contracts a consumer is ever likely to see. It's time for reform, alright, but insurance reform, not tort reform. A good start for our lawmakers would be for them to require insurance contracts to be written in plain English.