Delay, Deny, Defend: Why Insurance Companies Don't Pay Claims and What You Can Do About It

Jay M. Feinman, DELAY, DENY, DEFEND: WHY INSURANCE COMPANIES DON'T PAY CLAIMS AND WHAT YOU CAN DO ABOUT IT, Portfolio/Penquin, 2010; paperback edition 2013 by Delden Press

Posted: 8 Apr 2010 Last revised: 6 Jan 2014

Date Written: April 8, 2010

Abstract

The essential promise of an insurance policy is that when a claim is filed, the company will pay what it owes, promptly and fairly. Increasingly that promise is being violated. Insurance companies often delay payment of valid claims, deny payment in part or altogether, and force claimants to litigation to receive the benefits to which they are entitled. This new book exposes and documents the problem and offers solutions for consumers and lawmakers.

Today insurance companies often delay payment of justified claims, deny payment altogether, and force policyholders and claimants to litigation. Since the 1990s, as a result of the intense focus on price competition and maximizing shareholder value, insurance companies have transformed the claims process into a profit center, adopting elaborate systems to cut payments to policyholders and claimants. Many of these systems have been designed by McKinsey & Co. and other large consulting firms, and they involve sophisticated techniques to avoid the prompt and fair payment of claims and to reward company employees for underpaying valid claims.

Delay, Deny, Defend describes the history and operation of these systems in automobile and homeowners insurance, including segmenting claims, litigation strategies, computer systems such as Colossus and Xactimate, and changes in the role of claims adjusters. It also includes chapters on insurance in natural disasters such as Hurricane Katrina and on insurance fraud. Among other sources, the book uses insurance company internal documents, statements of present and former company executives, trial testimony, and other material not widely available. The book concludes with advice for consumers and proposals for legal and regulatory reform.

Keywords: Insurance, Insurance Claims, Bad Faith

JEL Classification: G22, K23, K29, K39

Suggested Citation

Feinman, Jay M., Delay, Deny, Defend: Why Insurance Companies Don't Pay Claims and What You Can Do About It (April 8, 2010). Jay M. Feinman, DELAY, DENY, DEFEND: WHY INSURANCE COMPANIES DON'T PAY CLAIMS AND WHAT YOU CAN DO ABOUT IT, Portfolio/Penquin, 2010; paperback edition 2013 by Delden Press. Available at SSRN: https://ssrn.com/abstract=1586453

Jay M. Feinman (Contact Author)

Rutgers Law School ( email )

NJ
United States
856-225-6367 (Phone)

Register to save articles to
your library

Register

Paper statistics

Abstract Views
932
PlumX