(Part 2)
Last week we discussed a report from the American Association for Justice (AAJ) which detailed some of the tricks that insurance companies play to avoid paying for a policyholder’s losses. These tricks include:
1) Denying reasonable and clearly covered claims merely to boost profits
2) Delaying the claims process until the policyholder gives up or dies
3) Providing difficult-to-understand insurance contracts to confuse consumers about what is and what is not covered in their policies
4) Using credit reports to refuse coverage to the poor, to senior citizens with little credit, and persons who have suffered financial setbacks through no fault of their own
5) Canceling coverage for terminally or chronically ill policyholders who rely on their policies to pay for expensive treatments to fight their illnesses
6) Canceling or refusing to renew coverage when policyholders make one phone call to inquire about possibly making a claim but who have not made a claim yet.
Because insurance companies have been hit hard by the current economic crisis, they will obviously want to recover their losses. This means that the above-mentioned unfair practices will continue to be the norm rather than the exception.
How can policyholders assert their rights, fight against these dirty tricks and avoid being outmaneuvered? Over two decades of insurance litigation experience has taught us some guidelines that make a huge difference in successfully pursuing an insurance claim. These guidelines are nothing new and in fact, we have mentioned some of them in previous columns. However, their importance cannot be overemphasized:
Read the policy carefully. Yes, it is hard but necessary. It is vital to an insured’s peace of mind to know exactly what is and what is not covered. In the case of health insurance contracts, it is important to know how to appeal a claim that has been denied.
Fill out the forms very carefully. Sometimes a form is just a form and mistakes do not much matter. However, insurance application forms must be handled with great care because mistakes or inaccuracies in the application may mean the difference between coverage and no coverage. Even if there was an honest mistake in the application, the insurer may seize on that as a reason to deny coverage or cancel the policy.
Do not cash a premium refund check. If the insurer cancels a policy, it may send a refund of the premiums. If the policyholder cashes the check, this may be interpreted as an acceptance of the insurer’s decision. Unless the policyholder really accepted the insurer’s decision, it’s probably best to hold on to the check until after the policyholder has clearly determined his or her rights and has thoroughly examined his or her options.
Put everything in writing. Pursuing an insurance claim is rarely a pleasant and painless experience. Things can become very adversarial and the policyholder will be unable to prove anything that an insurance representative told him or her over the telephone. It is prudent for the policyholder to keep records of every bill and correspondence with the insurer.
Do not give up. By employing tricks, insurers expect to wear down the policyholders and make them battle-weary so that they give up their rights in exchange for a superficial truce. Dealing with insurance companies is a battle of patience and perseverance. Do not lose the battle by giving up and giving in. However, in the midst of the fight, it is also important to keep one’s civility and professionalism.
Ask for help. The California Department of Insurance may be able to help. However, they cannot represent a policyholder privately. There are times when a policyholder need not take on the fight alone and must call for reinforcements. So if all else fails, the policyholder may have to consult an experienced insurance attorney to advise on the best course of action for the policyholder.
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C. Joe Sayas, Jr., Esq. is an experienced trial attorney who has successfully obtained significant results, including several million dollar recoveries for consumers against insurance companies and big business. He is a member of the Million Dollar-Advocates Forum—a prestigious group of trial lawyers whose membership is limited to those who have demonstrated exceptional skill, experience and excellence in advocacy. He has been featured in the cover of Los Angeles Daily Journal’s Verdicts and Settlements for his professional accomplishments and recipient of numerous awards from community and media organizations. His litigation practice concentrates in the following areas: serious personal injuries, wrongful death, insurance claims, unfair business practices, wage and hour (overtime) litigation. He is a graduate of University Law Center Washington, D.C. You can visit his website at www.joesayaslaw.com or contact his office by telephone at (818) 291-0088.
( Published November 22, 2008 Los Angeles Asian Journal p. C4 )
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