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“Why a Lawyer” by Anderson Cooper AC360

Insurance Companies Fight Paying Billions of Dollars in Claims

Anderson Cooper from CNN investigates revealed damning evidence against several major insurance companies, like Allstate and State Farm, which are profiting billions of dollars by underpaying auto accident victims.  The money the insurance companies take by denying accident victims would otherwise be distributed to pay for doctor visits, lost wages, and physical therapy.  However, insurance companies have adopted new strategies that make “take it or leave it” payout offers without realistic case valuations.  The result in many cases?  The “take it or leave it” offer only covers a fraction of the victims’ expenses.Picture yourself if you’re driving and another vehicle collides into your car from out of nowhere, severely injury you and your family.  You can barely walk, you are in sever pain, and need doctor visits, x-rays, CT scans, and physical therapy.  Wouldn’t you expect the insurance company of the driver who was at fault in the accident to cover your bills?

Roxanne Martinez did.  Roxanne was featured on CNN when she was hit by an SUV on the passenger side of her vehicle.  The accident caused Roxanne to hit her driver-side window, resulting in severe spine damage.  Roxanne’s medical bills quickly climbed and she thought Allstate, the insurer of the at-fault driver, would be paying for the injuries she sustained from the accident.

Nearly three years later, Roxanne found herself still fighting Allstate. The insurance company offered her $15,000, a sum that did not cover her expenses, and failed to include her pain and suffering, lost wages, or the emotional toll it took on her knowing whether or not she would even be able to afford the treatment she desperately needed.

This flat offer is an approach that insurance companies are use to make billions of dollars. CNN Investigates’s year-and-a-half investigation into the insurance industry found that if you are injured in a minor car wreck, major insurance companies will likely challenge your claim, drag you into court, and take years before even making an offer.  This offer is often considerably less than the full value of your claim.  Industry insiders say this results in 80% to 90% of injured victims accepting what the insurance company offers instead of fighting against the insurance company.

Why would a large insurance company, one that you trust and have given considerable amounts of money to over your lifetime to take care of you in the event you’re injured, act with reckless disregard toward your personal well-being?   The answer is surprisingly simple.  Insurance companies make more money if they pay you less money for your injuries, even if you need the money to cover necessary medical bills, lost wages, and physical therapy.

Jeff Stempal, a Nevada insurance law professor, told Anderson Cooper that accident victims are getting hurt further by being dragged into court by insurance companies. Other policyholders do not see any benefit, such as reduced premiums, when major insurance companies take a victim who needs the money for recover, through the process of litigating in the courtroom.  This practice doesn’t save consumers any money at all.  The only real beneficiary of keeping money from injured victims are the insurance companies themselves.   “To continue this kind of program is, in my view, institutionalized bad faith,” said Stempel.  These insurance companies seem to believe their money is better spent dragging someone hurt through court instead of helping them pay their bills.

Both Allstate and State Farm declined to comment on the results of the investigation with CNN.

Jim Mathis, formerly an insider with a large insurance company told CNN, “As long as the public allows this practice to occur, insurance companies will continue getting richer, and people will not get a fair & reasonable settlement. Period.”   Do the math: take $1,000 off of 1 million claims and you’ve made $1 billion in essence. When this happens with every claim over a number of years, the result is billions of dollars of profits for the large insurance companies.

Insurance companies achieve cost-cutting through a process referred to by the “Three Ds:”

  • DENY the claims;

  • DELAY the claims;

  • DEFEND claim denials.

A superior court judge told CNN that insurance company lawyers often indicate they want to settle many of these minor impact cases, but the insurance companies simply refuse to allow them to do it.  The insurance companies would rather fight every claim, even though that means not giving their paying customers the money they need to heal and return to their normal lives.  A lawyer for Allstate indicated the company’s strategy was to drive lawyers who represent victims completely out of the insurance industry. The company attempts to accomplish this by making it a policy to fight all claims.  It becomes “so expensive and so time consuming that lawyers would start refusing to help clients.”

Patterson Legal Group, LC refuses to stop helping people fight against unfair insurance companies. We will fight for you against any corporation that puts profits over people. Call our law firm today or fill out a free online consultation form to be contacted by someone from our firm.

Gary Patterson

About Gary Patterson:

Gary Patterson is the managing member of Patterson Legal Group, LC and has represented injured people for over 25 years. Gary earned his Juris Doctorate at Washburn University where he graduated with honors and served... Read More »

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