Dirty Insurance Company Tactics and Tricks

Personal Injury Guides

Be wary of common deceiving industry practices

If you were the CEO of a major insurance company, your compensation would probably be higher than other industry CEOs. Why? These large insurance companies make more money than many other industries.

A recent research study by the American Association for Justice (AAJ), titled “Tricks of the Trade: How Insurance Companies Deny, Delay, Confuse, and Refuse.” This report states how major insurance companies often deny valid claims, delay paying claims until policy owners just give up, discriminate against injured parties, deliberately confuse policyholders, and/or cancel policies so they don’t need to pay legitimate claims.

The following are some Dirty Tricks Insurance Companies play on injured people.

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    1. Deny Claims

    Some of the most recognizable insurance companies, including Allstate, AIG, and State Farm, have some recorded history playing this dirty trick on valid claimants. According to the AAJ, these and other insurance companies reward their employees for denying legitimate claims, and sometimes terminates employees who refuse to deny valid claims.

    The AAJ further says some of these big insurance companies are not above committing obvious fraud to avoid paying claim dollars. That is a strong, potentially brand harming statement, but the American Association for Justice stands by this assertion.

    2. Delaying Claim Resolution

    When insurance companies believe they cannot get away with denying legitimate claims, they go to Plan B: Delay. These companies bury claimants with paperwork, hoping policy owners will simply give up their fight to get their valid claim paid.

    The AAJ notes that some long-term care insurance companies will delay paying claims to older people (most of the long-term care insureds) hoping they will die before they need to pay the valid claim of customers. When this tactic rears its ugly head, your lawyer will earn his/her fee. Attorneys are all-too-familiar with this sleazy policy.

    Your lawyer will not stand for this trick. He/she typically threatens the insurance company with filing suit to embarrass the company with a public trial. Insurance companies dislike being in court, as much as they do paying claims.

    3. Confusing Policyholders with Language and Fine Print

    While the butt of many jokes, the language in insurance policies is deliberately confusing with much ambiguous language and volumes of fine print. Once again, your lawyer will prove his/her knowledge by reading and translating this seemingly foreign language for you, into simple English.

    Even many insurance company personnel fail to understand their own contracts. As you now know, the confusing language in insurance contracts is specifically intended to confuse all non-lawyers.

    4. Health Insurance Companies Dislike Sick People

    Health insurance personnel sometimes receive bonuses if they meet or exceed a company’s so-called “cancellation goals.” When insureds cost the company money, some companies cancel their policies so the bonus money goes to staff vacations or new cars, instead of medical treatment. Considering the expensive premiums for health insurance, you would think insurers would at least pay valid claims.


    It’s sad that the insurance company you trust to “have your back,” often turns to shady tactics to avoid paying legitimate claims. Unfortunately, per the AAJ, this is what some major insurers do, regardless of their expensive advertising to the contrary.

    Insurers get excited when policy owners do not hire lawyers to manage their claims. Experienced attorneys are aware of the dirty tricks insurers play on policyholders who do not have legal representation. Good lawyers, not subject to insurer intimidation, will fight for your rights to get paid for valid injuries.

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