Delay, Deny, Defend: three tactics employed by much of the insurance industry in aggressively fighting insurance claims.
Delay, Deny, Defend is the title of a book whose author, Jay M. Feinman, documents how the tactics are used by insurance companies to bash personal injury claims, homeowners and other claims.
Personal Injury Claims
Insurance companies delay payment of valid claims, deny all or part of valid claims, and aggressively defend lawsuits consumers are forced to bring to obtain fair claim value.
“In general, represented claimants recovered two to five times as much as those without the aid of a lawyer”
Subtitled “Why Insurance Companies Don’t Pay Claims and What you Can Do About It”, the book proves its point through numerous case studies. In one, an Idaho woman sustained traumatic injuries in a motor vehicle accident and the insurance company offered settlement for half the amount of the medical bills. A jury ultimately awarded $102,000 plus $9.5 million punitive damages against State Farm Insurance Company.
In that and other cases, “utilization review”, “quality review” and other paper reviews of medicals performed by hired guns summarize actual medical records with the goal of reducing the insurance company’s costs.
Computer Claim Evaluation
Insurance adjusters used to review medical records and other documents in determining full fair claim value. Now, computer programs crunch the numbers. One program, Colossus, takes in data covering the injury, trauma and treatment, then churns the information through over ten thousand programmed rules and parameters. The resulting slanted bottom line dictates settlement value.
As the author points out this approach favors insurance company profits at the expense of accuracy and fair claim value.
Homeowner policies might appear relatively straightforward. But they’re actually loaded with exclusions and exceptions, providing ample opportunity for denial of claims. The book explains so-called Xactimate software employed to calculate claim value. But, as an investigation by the California insurance commissioner found, the software fails to document how figures were determined, resulting in low and unsupported settlement offers.
The author documents delay, deny, defend tactics targeted at homeowners attempting to recover after Hurricane Katrina’s devastation. Insurers rationalized that policy exclusions allowed them to deny coverage for damage by flood and required payment only for wind damage. But what if a home demolished by hurricane leaves nothing, evidence or otherwise? Claims were denied, leaving homeowners no option than to go to court where they incurred expenses including payment of experts. Homeowners who stood up to insurance companies by going to court tended to win after the forced delay.
Among other post Katrina tactics documented was the use of inexperienced adjusters, trained for two days sometimes in a fast food restaurant. Then given “a laptop and a ladder” the new adjusters were set free to deny claims.
Delay, Deny, Defend – What Consumers Can Do
Delay, Deny, Defend is highly recommended reading for anyone with insurance. Delay, Deny, Defend is must reading for anyone going through the insurance claim process.
“One study of uninsured motorist claims concluded that represented policyholders recovered 90 percent more than those without lawyers.”
A book review can only scratch the surface of delay, deny, defend tactics, described with clarity and a historical perspective by the author. Eleven pages of footnotes meticulously support the author’s points. The fine print is saved for the back of the book, making the text highly readable.
Delay, Deny, Defend, authored by Rutgers University professor Jay M. Feinman, published by Portfolio, member of the Penguin Group.
For a case in which a Massachusetts court found a major U.S. insurance company engaged in “deeply disturbing” practices, click here.