In the insurance industry, March holds a special designation as "Ethics Awareness Month." Ethics are fundamental to the insurance industry, as there is a factor of trust involved when someone decides to obtain insurance coverage. Policyholders rely on insurers to fulfill their obligations in the case of a loss. While commendable that the insurance industry commits a month to prioritize ethics awareness, unfortunately, there are instances where insurance companies fail to meet their commitments. If they consistently did, there wouldn't be a need for law practices like ours, dedicated to advocating for victims of unethical insurance practices. Chip Merlin of Merlin Law group spoke on this topic a few Marches back in his blog post March is Ethics Awareness Month for the Insurance Industry.
“We assert that insurance companies that tie claims payments to the profitability goals of the company, rather than fully and promptly paying what is owed, are often encouraging their employees to deny or underpay claims”
- Merlin Law Group
At the end of the day, insurance providers are companies, naturally profit-driven. People employed by the companies are faced with their own ethical dilemmas; optimizing shareholder value and contributing to profitability goals of the company or helping the insured recover fully from their loss.
The iconic Pixar movie “The Incredibles” depicts insurance company tactics in a comical but realistic way. The main character Bob Parr works as an insurance claim handler and gets reprimanded by his boss for sharing too many loopholes from inside the company, stating that policyholders are borderline experts in the inner workings of the company. “We’re supposed to help people,” says Bob, in which his boss responds, "We're supposed to help OUR people! Starting with our stockholders, Bob! Who’s helping them out?”
While this is a fictional insurance company, it is not too far off from reality. Insurance companies often use ambiguous language to make it easier to get away with underpaying or denying insurance claims, exploiting policyholders to protect the company’s bottom line. Even if they remain within legal boundaries, they are not living up to their ethical obligations. If they stray beyond legal boundaries, acting in bad faith, they could face lawsuits.
Insurance companies often rely on the fact that policyholders don’t understand the complexities of their insurance policy. Seeking legal assistance can help ensure that you are not being tricked into being underpaid or denied compensation for your loss. Contact our insurance law firm specializing in property damage insurance claims and personal injury insurance claims for a policy review. We’re here to help; no fee unless we win your case! Call or text (859) 900-BART or email contact@denham.law for more information.