Business as Usual for Allstate, Unum and Eight Other Insurance Carriers; The Ten Worst Insurance Companies in America

A report this month compiled by the American Association for Justice documents what most of us already know: Some of the county’s top insurance companies consistently place their own financial interest above the interests of their policyholders and raise premiums, delay claims and deny coverage. For”The Ten Worst Insurance Companies in America, see, www.justice.org/docs/TenWorstInsuranceCompanies.pdf.

Although Allstate stood out as number one because of its shameless mission statement “to earn a return for our shareholders,” our old nemesis Unum ranked number two. Conseco, another insurer we regularly battle on behalf of policyholders, ranked number five.

On page one of the report is this telling statement: “The insurance industry has so much excess cash, it may spark a downturn in the industry.” How did the industry amass such wealth? According to the report “the name of the game is deny, delay, defend – do anything, in fact, to avoid paying claims.”

Take disability insurer Unum, for example, which paid it CEO $7.3 million in 2007, raked in $679 million that same year, and has assets of $52.4 billion. Debra Potter sold Unum disability policies for many years as part of financial services packages. She bought one herself. She developed multiple sclerosis and filed a claim for benefits. Unum denied the claim, alleging the disease was “self-reported,” a euphemism for “fraudulent.” Potter’s physicians supplied letters and memos validating her illness. Unum continued to deny the claim for three more years. Potter hired a lawyer. Only then did Unum eventually pay Potter’s disability benefits.

We see this every day. It doesn’t matter the disease and, sadly, it’s beginning to infect the entire industry as more carriers realize what insurers such as Allstate and Unum are able to get away with until regulators step in and administer what many times is little more than a slap on the wrist.

The insurance industry is sitting on mountains of gold accumulated from policyholder premiums. Understandably, the carriers have a duty to their shareholder’s to protect assets from fraudulent claims. But, the carriers go way beyond that objective and deny valid claims every day knowing that the fewer claims they pay, the higher their profits will be. Nothing in the AAJ report shocked us. In fact, we would have been surprised had the report reached any other conclusion. But don’t expect the insurance industry to show any shame. They’ll deny and delay as always, and continue business as usual until laws are changed to prevent such conduct.

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