Did you receive an offer from your insurance company to settle a claim for auto or other property damage that you felt was too low and did not accept? Did it seem like that resulted in delay after delay of paying out what you believed to be a fair amount? Well, you are not alone and it wasn’t you. It may have been your insurance company and its attempt to grow profits at your expense.
Dubbed ‘Good Hands or Boxing Gloves,’ the practice of giving prompt service to insureds who accepted a payout that was really a low-ball amount for their claim while fighting — putting on the boxing gloves — an insured to delay payment when they do not accept the low offer has been a common business practice since the 1990s among insurers.
The duty of good faith and fair dealing aside, insurers were intentionally making it easier for clients who accepted a lower payment for their claim and harder for those who fought for the full value of the insurance policies that they’d been paying for. Insurance dispute lawyers in Memphis, Tennessee and elsewhere throughout the country were needed if a consumer had any hope of getting a fair payout for their insurance claim.
The name plays on the slogan of Allstate, “Are you in good hands?” Allstate hired a consulting company in the 1990s to help it turn its insurance business into a more profitable unit. And it did, at the hands and pocketbooks of its insureds. Allstate reported $4.6 billion in profits in 2007, twice what it was making in the 90s. But, it is not the only offender; State Farm also took on the practice of “Delay, Deny, Defend,” as coined by professor and author Jay Feinman, after seeing the results on Allstate’s bottom line.
Waiting for a payout on a insurance claim can, itself, create hardship for a family who’s left without a car or home due to a devastating accident. What’s even worse is that the insurance company policies of forcing an insured to fight for coverage that is owed can be so costly that the insured may feel forced to accept less than what his or her claim is worth.
The lesson to be learned is that, despite what you may think or hope, your insurance company may not be on your side. If your insurance company has denied a valid claim for coverage or has offered you less than what it takes to repair your car or home, a Tennessee attorney can help you evaluate whether it’s worth it to pursue greater compensation.
Source: Huffington Post, “Insurance Claim Delays Deliver Massive Profits To Industry By Shorting Customers,” 13 December 2011