Insurance companies devious new ways to rip you off

[pb4uski]

As others have said, nothing new here.

Life insurance companies are notorious for slow pays. It took several months to collect a $5,000 policy that my FIL paid premiums on for over 30 years. I was convinced that their fax machine was connected to a trash can.

I cashed in a policy this summer and it took a little less than a month between when I submitted the surrender application and when the cash surrender value was posted to my checking account.

 

[Teacher Terry]

LOL. That made me think of an experience I had about 44 years ago in Chicago. I ordered a cheapo brand new Chevette from a Z-Frank satellite showroom just as the oil crisis was causing gas prices to skyrocket. When I placed the order, they gave me a price on my existing car ($600, IIRC) which I thought was good. The salesman smiled and promised to honor that trade in price unless I damaged the car or like issue.

My brothers and several guys at work laughed at my naivete and told me they would never honor their promise. I made a bet I would get the car at my price. I went to pick up my car with a check from the credit union for the exact amount due, minus the trade-in amount. Sure enough, "market conditions" had changed making my trade-in now worth only $200. I raised hell in the showroom which drove some other customers out. I got nowhere. So, I told them, "Call the main showroom over on Western Avenue and tell them I am on the way to talk to the big guys." When I arrived at the main showroom, they started out promising to find a resolution and ended up at the same place. It was obvious to me that they could sell my cheapo, great mileage, new car at a premium because of rising gas prices. I raised absolute hell to the point that a salesman got in my face in the showroom screaming, "are you calling me a liar"? Customers fled. At closing time, I told them I would be out on the sidewalk the next day (a Saturday), and I was. A senior manager quietly invited me in, took my check and the title to my trade-in and handed me the keys to my new car.

I go out of my way to find simple deals these days. No way I will ever go through that process again. But I always react the same way if I think someone is intentionally cheating me.

That’s great and I’m glad it worked!!

 

[JoeWras]

I used to be an insurance company cheerleader.

In recent months, I "saw the light" and was converted into a bit of a hater. My anger started with these recent ridiculous premium rises I'm absorbing.

Yesterday I met with a field claims adjuster that my non-profit was referred to by our insurance company. He is independent, even though hired by the company.

Anyway, as he processed our claim, he gave me an earful about insurance company shenanigans, and showed me how he'd make the claim as favorable as possible. He just warned us that the desk adjuster will probably deny it.

He had stories. And none favorable to insurance companies. I found it interesting that a contractor hired by the insurance company, gave me 10 minutes of dissertation that was excoriating insurance companies. It said a lot to me.

 

[VanWinkle]

I used to be an insurance company cheerleader.

In recent months, I "saw the light" and was converted into a bit of a hater. My anger started with these recent ridiculous premium rises I'm absorbing.

Yesterday I met with a field claims adjuster that my non-profit was referred to by our insurance company. He is independent, even though hired by the company.

Anyway, as he processed our claim, he gave me an earful about insurance company shenanigans, and showed me how he'd make the claim as favorable as possible. He just warned us that the desk adjuster will probably deny it.

He had stories. And none favorable to insurance companies. I found it interesting that a contractor hired by the insurance company, gave me 10 minutes of dissertation that was excoriating insurance companies. It said a lot to me.

That's the guy I want working for my company!! He can get paid to denigrate his employer and make the customer think he is an honest guy........

Shenanigans happen in all business, but it is usually the exception, not the rule.

VW

 

[athena53]

Shenanigans happen in all business, but it is usually the exception, not the rule.

I agree. DS worked as a claims adjuster for two companies over 15 years, most recently settling large commercial claims but many of those years settling personal auto claims. I know my son- he's a solid Christian and practices what he preaches and wouldn't be able to sleep at night if he worked for a company that made a practice of cheating claimants.

He's now in an actuarial position. What drove him out of claims adjusting was having to deal with plaintiffs' attorneys.

 

[Texas Proud]

I have mostly had good results with insurance companies...


All car accidents were fixed by a very reputable company and fully paid for..


The only home claim was a bit disappointing as I did not know my 'replacement' premium did not include an old roof... it did for the cost but it also included depreciation... and a bigger deductible than I thought I had they guy priced the new roof at a pretty high amount so after the deductions I got about 25% for a new roof... it was not shady as it was all in the policy, clearly laid out...



The only thing I would say that I disagree with is the amount they pay for a total car or a loss in value... I totaled one car and they looked at comps and came up with a number and then deducted 11% to get to 'real market value'... another was DW was hit on our new car and they did not want to pay loss of value... took over a year but got about 50% of what I should have...

 

[Midpack]

Though I didn't know they'd gone further into using personal data to tailor premiums, nothing in the article surprised me much. They are for profit businesses, and claims go higher every year for reasons beyond the insurance companies control - that is going to send premiums higher, more than inflation.

If you're lower risk, you'd rather not pay part of your premium for others in the pool who are higher risk. OTOH if you're high risk, you don't think it's fair. No easy answer.

And competition can help. If you don't get new quotes every year or so, IME you will find your premiums will drift up until they're not competitive - I learned that the hard way after 30 years with Liberty Mutual, assuming they were giving me competitive rates. Turned out they'd been gouging me for years. No insurer will fool me that way again...

CAVEAT EMPTOR

 

[jollystomper]

I do not know if my recent auto claim against the insurer of the person who hit my car took so long to resolve due to (a) incompetence or (b) them not responding to me in hopes I would drop the claim.

The day after I made the claim I received a call from them. It went to my voicemail but no message was left. After a few days I called the claims line, they gave me the claims adjuster who the claim was assigned to, and indeed the call had come from that office. But I spent over a month constantly leaving messages (every time I called the office "she was not in" and I was sent to her voicemail) without getting anything returned. Then I got her managers name and left voicemails for her, but they were not being returned.

I finally had to go through the corporate office, where they tried to connect me to the manager who was in, but they could not.At least, at this point, the manager called me back. She said she never received any of my voicemail messages. Yeah, right. A claim that should have been settled in less than 2 weeks took 2 months.

 

[MichaelB]

With money market rates at 5% insurers have even more motivation than ever to delay payment of claims. 5% is more than most insurers generate in profit. It is incumbent on us as insured policyholders to act.

At the first sign of unreasonable delay I would file a complaint with the state insurance regulator and the insurer executive office.

 

[Texas Proud]

Though I didn't know they'd gone further into using personal data to tailor premiums, nothing in the article surprised me much. They are for profit businesses, and claims go higher every year for reasons beyond the insurance companies control - that is going to send premiums higher, more than inflation.

If you're lower risk, you'd rather not pay part of your premium for others in the pool who are higher risk. OTOH if you're high risk, you don't think it's fair. No easy answer.

And competition can help. If you don't get new quotes every year or so, IME you will find your premiums will drift up until they're not competitive - I learned that the hard way after 30 years with Liberty Mutual, assuming they were giving me competitive rates. Turned out they'd been gouging me for years. No insurer will fool me that way again...

CAVEAT EMPTOR

I do not get them every year... maybe every 5 or so.... but each time I go to an independent agent they say they cannot match the rates I have... only once was someone able to match them, but not beat them... so I stay put...


BTW, I do get extra discounts for being a long term customer...

 

[68bucks]

My biggest insurance beef is with health insurers. I have a HD plan. We are blessed to be healthy so they pay nearly nothing outside well care. So last year all of a sudden I have a major back issue. A month of barely being able to walk let alone anything else. So an ER visit, which I pay 100%. Doctor visit, same thing. Meds etc. same thing. My doctor wants an MRI of course but insurance of course denies it. They want an xray and PT first which or course I would pay for. Trying to get approval, and pain relief I am working with the lowest cost place to get an MRI. I call them one day and ask if I can just get the same price as the insurance company if I just pay for it outside insurance. The provider checks my cost, $275. So the insurance company wants me to pay for an xray and however many PT sessions before they will ALLOW me to pay for an MRI. I paid for the MRI that wasn't applied to my deductible, which is what they wanted of course. Herniated disc, which wasn't going to be fixed by PT or an x-ray. So I suffered 6 weeks of severe pain so they could save $275 against my deductible not out of their pocket. It amazes me a person 100 miles away that has never seen me can overrule my own doctor that is treating me. I have great disdain for insurance companies in general but health insurance in particular.

 

[JoeWras]

My biggest insurance beef is with health insurers. I have a HD plan. We are blessed to be healthy so they pay nearly nothing outside well care. So last year all of a sudden I have a major back issue. A month of barely being able to walk let alone anything else. So an ER visit, which I pay 100%. Doctor visit, same thing. Meds etc. same thing. My doctor wants an MRI of course but insurance of course denies it. They want an xray and PT first which or course I would pay for. Trying to get approval, and pain relief I am working with the lowest cost place to get an MRI. I call them one day and ask if I can just get the same price as the insurance company if I just pay for it outside insurance. The provider checks my cost, $275. So the insurance company wants me to pay for an xray and however many PT sessions before they will ALLOW me to pay for an MRI. I paid for the MRI that wasn't applied to my deductible, which is what they wanted of course. Herniated disc, which wasn't going to be fixed by PT or an x-ray. So I suffered 6 weeks of severe pain so they could save $275 against my deductible not out of their pocket. It amazes me a person 100 miles away that has never seen me can overrule my own doctor that is treating me. I have great disdain for insurance companies in general but health insurance in particular.

Suffered for 8 months of "required protocol" before getting the MRI. All on my own dime since it was high deductible plan. PT is expensive. Steroids suck.

My 30 year old back issue finally blew out and I required surgery. I could have been saved a lot of pain. My surgeon says that acute cases similar to my chronic case require strong opioids, but since I gradually fell into it, my brain suppressed it until it couldn't anymore.

I could go on. Back surgery was a success. Best I've felt since I was 21.

And yes, I literally "feel your pain" on this required protocol issue.

BTW: unfortunately, this happened because people with short term back strain killed the system by screaming MRI, MRI! So these protocols got put up as blocking delays for the typical strain patient. They ruined it for everyone.

 

[KarenF]

Years ago, I had something similar, went to in-network hospital with my in-network doctor, and got some out of network anesthesia doctor (something I had no control over).

So they billed me ~$1K for him.

It took over a year every couple of months to phone in and fight the same bill, repeatedly..

I would have given up, which is what they want, but DW knowing the system better encouraged me to continue to fight.

Finally they wiped away the bill.

But I shouldn't have had to do all that and spend all those hours on the phone each time.

I had the SAME thing but my out of network anesthesia bill was $2500. It turns out that the doctor was actually in network and the insurance company was just messing with me. They blamed it on miscommunication - I lived on the border of 2 states and had the surgery in the state I did not live in. Anyway, I won, after months and months. Most people would have given up. Soon after, the insurance company was fined a lot of money for this practice. I feel awful for people that don't have the capability or inclination to fight. Insurance should not be like this!

 

[The Cosmic Avenger]

The problem is that, from a behavioral perspective, our private insurance is actually antagonistic to capitalism.

Even when it works properly, we choose providers and facilities from a list, but the insurance providers pay. We often have no idea what our insurance pays our providers. And when we are responsible for payments, like the last few posters, we often don't or even can't know what our cost will be ahead of time, we have to commit to a service and then pay whatever is billed, which varies by much bigger factors than any other market, or try to negotiate the price after accepting and utilizing the service. There really isn't any other industry that functions like this from a consumer payment perspective.

 

[MichaelB]

The problem is that, from a behavioral perspective, our private insurance is actually antagonistic to capitalism.

Insurance is sharing of common risk. Homeowners insurance is a good example. Health care insurance does not do that.

Health care insurers really are health care intermediaries. They position themselves between providers and users of health care and control each transaction, placing their own financial benefit above the health of users or the availability of care of the providers. The system heavily penalizes all parties that choose not to use their intermediation.

It is almost impossible for users and providers to find an optimal point where the interests of both are maximized, the health care intermediaries prevent that.

 

[The Cosmic Avenger]

Thanks MichaelB, that was what I was getting at, and that will be useful when talking about this in the future.

 

[Buckeye]

This is a vicious article. OK, I'm a little prejudiced because I worked in the property-casualty business my entire career. I have no doubt that these practices go on and that they have in the past, especially among the lowest-cost providers. I knew a claims handler who worked for one of those companies and they loved it when he was able to settle a claim that would have brought far more if the claimant had known better.

Insurance is heavily regulated in the US. State regulators monitor complaint levels and there's a lawyer around every corner willing to take on bad-faith claims handling suits (alleging that the company dragged their heels or lowballed the claim). Awards can include punitive damages.

Yes, they use whatever data they can to assess your risk of a claim. To my knowledge, I have never had a company check my credit score or install a device to monitor my driving habits without getting my express permission first. Yes, they rate by Zip Code. Doesn't that make sense? If you're in a tornado-prone area or a flood zone or a neighborhood where car thefts are common, shouldn't you pay more? (Actually, regulators "flatten" these rate differences in many cases.)

Insurers need to prove correlation before they can use a rating factor to charge someone a different rate. This is how insurance works- higher-risk insureds get charged more premium. Either that or lower-risk insureds end up subsidizing them.



So... they try to price them correctly. And your point is.....?

Maybe a lot of what you say applies many states but definitely not in FL. The stories of what is happening with Idalia claims is beyond belief.

 

[jazz4cash]

Nutrition trackers!