Asian Journal- The Filipino-American Community Newspaper

THE insurance industry is one of the wealthi-est industries, owning several trillions of dollars in as-sets, earning average profits of over $30 billion annually, and paying its CEOs more than any other industry. One would think that an industry possessing such massive wealth would deal fairly with the common person. The experience of many consumers, however, show that the indus-try actually engages in tricks, sometimes unethical behavior, even outright bad faith, in or-der to deny legitimate claims.

These turbulent economic times have not left the insurance industry immune. In fact it is desperately trying to recoup its losses. For the millions of con-sumers out there, this will likely mean rate hikes, more claim denials, more delays, and gen-erally more tricks. Consumers should also expect the provisions in their insurance policies to get more confusing and difficult-to-understand.

Confusing consumers is the insurance industry’s first line of defense against claims. It is eas-ier for adjusters to deny or delay claims if the policyholder did not understand what was covered and excluded in the policy to be-gin with. In trying to make sense of insurance contracts, one State Supreme Court concluded: "Insurers generally are attempting to convince the customer when selling the policy that everything is covered and convince the court when a claim is made that noth-ing is covered."

Even though more than half of the states in the country have enacted "plain English" laws for consumer contracts, many per-sons still do not fully understand their insurance coverage. For ex-ample, many people still believe that if a new car is totaled a few weeks after it was purchased, that the insurance company will pay for full replacement. In fact, insurance companies will deduct for depreciation, leaving the poli-cyholder to pay the remaining thousands owed on the car loan. Similarly, 7 out of 10 homeown-ers believe that their homeown-ers insurance will pay for the full cost to rebuild a home destroyed by a natural disaster or fire and will fully reimburse the cost of lost personal belongings. How-ever, insurance companies "cap" the amount they pay and will deduct for depreciation when as-sessing damage.

Despite all these horrid sce-narios, these insurance tricks can be exposed for what they are and consumers can prevail on a claim. Consider the following true-to-life stories of consumers we represented:

1) In a life insurance case, we helped an 85 year-old Fili-pino widower whose 84 year-old wife died when she fell from the stairs at home in the Philippines. Accidents leading to deaths are compensable under the policy. However, the insurance compa-ny refused to pay the insurance benefits and argued that the wife died of an illness, a cause of death that is not covered under the policy. The company plainly ignored photos showing the wife’s injuries from the fall.