Thursday

The "Good Hands" People?

Are you in good hands? Maybe. Maybe not.

The results are in of a comprehensive investigation of thousands of legal documents and financial filings by the American Association for Justice to determine the best and the worst of the insurance companies. Apparently the "good hands" people (who spend a fortune on very well done tv ads) ranks the worst.

AAJ says it based its ratings on what it found to be "a distinct pattern of insurance industry greed"
among ten companies that are reported to do everything possible to avoid paying claims, employ hardball tactics against policyholders, and reward their executives with fat salaries while raising premiums to max out their profits.

American Association for Justice CEO Jon Haber is reported to have said that "Allstate ducks, bobs and weaves to avoid paying claims to increase its profits."

The AAG charges are reported to be backed by thousands of court documents and materials uncovered from litigation and complaints filed with state insurance departments, Securities Exchange Commission and FBI records, and news accounts.

2nd worst? Unum. Indicative of their attitude may be the settlement they struck in 2005 with 48 state insurance commissioners chasing them over their disability insurance and other insurance practices.


3rd is AIG, the world's biggest insurer whose slogan was "we know money." That says it all.

Coming up in 4th place is State Farm, who we have also filed several dozen lawsuits against over their recently publicized practice of selling totaled out cars and trucks on the open market in a way that allowed salvage rebuilders to reconstruct the remains and pawn them off as normal used cars to unsuspecting consumers. State Farm is still in trouble over the Hurricane Katrina claims handling.

Conseco wins 5th place, if you can call it winning, for their handling of long term care policies for the elderly who apparently made it so hard to make a claim that people often gave up or died.

Perhaps most surprising was the treatment given the consulting giant McKinsey, who was hired by at least 3 of the "bottom ten bad boys" of the insurance industry to adopt what AAJ calls "aggressive tactics" in claims handling. Most people never heard of McKinsey, but it shouldn't surprise them that insurance companies hire consultants to help them figure out how to avoid paying a claim.

Not sure how claims-friendly your insurance company is? Let's hope you never have to find out. After all, the insurance companies don't own all those buildings downtown because they are paying claims.

A good example is the first case we ever fought all the way to the Ohio Supreme Court. It was Cincinnati Insurance Company's denial of a $1,000 claim over a used pickup truck. A consumer bought it and got a title in his name and then the truck was stolen from him. He filed a police report and a claim with his insurance company. Turns out some of the serial numbers on the truck didn't match so the insurance company said he had bought a stolen truck so he didn't legally own it himself (even though he had the title) so they weren't going to pay the claim, which was only about $1,000. They fought the case for several years, all the way to the Ohio Supreme Court, losing every step along the way, but holding on tight to the money. Eventually it all came to an end and they had to pay out but the law at that time did not require them to pay the policyholder's legal costs. The law firm got about $500 in fees for fighting a case for several years and spending over $50,000 of time and litigation costs. Why did we all do it? Because it wasn't right.

Sometimes we fight a case for just that reason. What the defendant is doing, just isn't right. In those cases, the only way to stop that kind of consumer abuse is to turn to the courts, dig in your heels, and fight.