Insurance Industry Guilty of Fraud
The Courts & Press Expose Fraudulent Practices by Insurers
As a personal injury sufferer, you may have already discovered that in your time of need, your insurance company may not be there for you.
If that is the case, you are not alone. Over the past few years, the fraudulent activities of giant insurance companies such as Allstate and State Farm have been exposed on King-5 News, on Dateline, and in courts of law.
The General Version of the Story
Like all commercial companies, insurance companies are in business to make a profit.
They receive money when you make your regularinsurance payments. They pay out money on claims.
To make the most amount of money possible, insurance companies can:
||Pay out less claims|
||Pay out less on the claims they do pay|
Although the goal of making the most money possible is acceptable, when insurance companies intentionally take actions that mislead or mistreat you as a policy holder, it is unacceptable and often illegal.
A Specific Version of the Story
Perhaps the most offensive and well-known example of an insurance company acting in an inappropriate manner involves the case of Ethel Adams.
At the age of 60, Ethel was in a coma for nine days and a hospital and nursing home for five months after her car was smashed by a pickup truck that ran into oncoming traffic.
Despite having $2 million of insurance coverage, a subsidiary of Farmer’s Insurance decided Ethel did not qualify to receive any money, arguing her car crash was not an accident. The company’s reasoning was this:
- Michael Testa intentionally forced his girlfriend off the road
- The girlfriend was driving the pickup truck that hit Ethel
- Therefore, the pickup truck did not hit Ethel by accident, but on purpose
Ethel’s medical bills rose to over $500,000 while she struggled to walk again. The state of Washington paid those bills through workers’ compensation while the insurance company contributed nothing.
Coming under fire from the press and legal system, Farmers insisted it did not deny Ethel’s claim, despite Ethel having a letter from the company denying all claims.
Farmers attempted other tactics to avoid facing Ethel’s rightful claim. Finally, on October 19, 2005, the state of Washington gave Farmers until the end of October 20, 2005 to agree to pay Ethel or face legal action.
Who Protects Your Rights If Your Insurance Company Doesn’t?
In an unrelated case in 2001, the Utah Supreme Court found that “State Farm’s fraudulent practices were consistently directed to persons – poor racial or ethnic minorities, women, and elderly individuals – who State Farm believed would be less likely to object or take legal action.”
In other words, you cannot know your insurance company has your best interests in mind. Remember, the less money they pay out, the more money they make.