An article in today’s Dallas Morning News highlights a report by the Consumer Federation of America (CFA) which found that the insurance industry systematically inflates premiums for property and casualty insurance coverage. The report, released yesterday, found that while the insurance industry enjoyed record profits in 2007, it overcharges consumers and underpays policyholders claims.
You know, worker's compensation is really a completely different creature than what is thought of as the "insurance industry". It may technically be insurance, but it isn't what is usually being talked about on these boards when the insurance industry is brought up. Lumping it in together with casualty insurers is like lumping veterinarians in with pediatricians.
Sangre Naranjada you may be interested in the following taken from the Texas Department of Insurance website. That $48 million figure was for just one year. It's been that way every year. _____________________________ Each year TDI helps consumers with more than 30,000 complaints. Because of TDI´s efforts, consumers received $48 million more in claims and refunds last year. Link
Captain O'Hagan: I swear to God I'm going to pistol whip the next guy who says, " Shenanigans." Mac: Hey Farva what's the name of that restaurant you like with all the goofy **** on the walls and the mozzarella sticks? Farva: You mean Shenanigans?
BT: OK. Not to pick knits, but what I'm hearing is that: yes, the same insurance companies issue workmen's comp as casualty and other forms of insurance; and yes, they want to make money doing both. That being the case, it's still the insurance industry. I mean, let's be honest. And this part: "different customers, different competitors, different market forces" is just not true. The same companies compete. The same companies insure for workman's comp and liability/casualty/etc. Though I'm not sure what you mean by "market forces", they still make money by taking money in premiums, and denying claims to save money as a matter of course. Believe me, it wasn't the consumer who wanted workmen's comp created back in the 1920s. But to the point--I don't know if this tertiary dialogue is relevant to the point. Or if it's in defense or damnation of the industry with blinders and no soul.
Absolutely it makes sense for them to deny a claim. First, comp. carriers usually have captured or in-house counsel working the files for a song and a dance. Second, denying a claim stating that an injury occurred outside the course and scope of employment not only gets them one step closer to keeping the set-aside, but also allows the carrier to hang on to the money longer, and therefore keep all the interest that the set-aside is bringing. That's the motivation for not paying claims promptly....the longer they're able to stall, the more interest or investment capital they will accrue. And the carriers are allowed to keep every, single penny of it. Usually the comp. carrier also has a CGL rider/clause in the policy K, and by challenging whether or not an injury is covered by comp, they may be able to kick into the CGL and outside the regs, and when the action is filed they'll eventually move for summary judgment on the grounds that the plaintiff is precluded by comp. from filing a common law coa, that the injury is covered by comp. Doing so saves the carrier money on both ends and usually frustrates the plaintiff/claimant to the point where they give up. I've seen that very ******** no less than 10 times in the past 2 years alone. Add intentionally frustrating the filing party into giving up and the financial benefit re interests and you've got plenty of motivation to deny claims as a matter of course. More than plenty. So comp. may be "highly regulated" but it still follows the rules of the same, basic screwed up insurance claims protocol. Remember when the new comp. law was sold to the people as one that will reduce comp. premiums for employers who have comp? Go talk to a business man who carries comp for their employees....ask them if they saw any savings then and now.
