| As I mentioned in part one of this series of | | | | insurance may find their coverage terminated |
| articles, Corporate Body Snatching and Client | | | | when their next renewal date comes up. Since |
| Rustling - How Insurance and Investment | | | | state auto licensing, loans and home mortgages |
| Companies Steal Clients For Huge Profits, nearly | | | | demand coverage, unexpected cancellation by a |
| everyone has some sort of insurance product. | | | | company can send the client scrambling to get |
| Here, I'm focusing on how people may be | | | | whatever insurance they can find. |
| manipulated and scammed with Property and | | | | Most people don't make three accident claims |
| Casualty Insurance, most commonly known as | | | | within three years. So, to discourage as many |
| Auto and Homeowner's. | | | | claims as possible, unscrupulous companies count |
| Auto and homeowner's insurance functions a lot | | | | someone calling the customer service department |
| like health insurance. If the insured never makes a | | | | with an innocent question as a damage claim. |
| claim, the premiums paid are nearly pure profit | | | | They use the excuse that if someone asks the |
| because the company doesn't have to pay out | | | | question, they really have a potential damage |
| anything. Imagine this kind of insurance company | | | | claim and are trying to find out if they'll get more |
| as a large pool of money that's being fed by a | | | | money than the cost of their deductible if they |
| constant stream of premium dollars flowing into it. | | | | file. Statistically, clients who ask questions are the |
| When something unfortunate happens to one of | | | | ones who want service and make claims. Time is |
| the premium payers, the company removes a | | | | money. The fewer customer service reps and |
| pre-agreed amount of money and gives it to the | | | | claims adjusters who are employed, the less |
| client. The total settlement given to the client is | | | | profit the insurance company is wasting on their |
| nearly never equal to 100% of the loss due to | | | | salaries, health and retirement benefits. |
| the deductible stated in the insurance policy. | | | | Auto and homeowner's insurance are generally |
| Anyone who has filed an accident claim will know | | | | looked upon as something everyone hopes they |
| how this system works. What most people don't | | | | don't have to use. But what happens when clients |
| realize is how they can be manipulated into | | | | have to take their business elsewhere? That's |
| accepting less compensation than they deserve. | | | | when they realize they're wearing golden |
| Basically, any kind of insurance is simply a promise | | | | handcuffs. When someone's policy is canceled, |
| to cover the risk of financial loss due to accident, | | | | they are usually condemned to buying high-risk |
| health problems, liability, or death. Only items of | | | | insurance because no company wants |
| value can be insured against loss, and only | | | | accident-prone customers. If they can get some |
| legitimate claims are honored. Even animals can be | | | | company to insure them, those high-risk |
| insured. A horse breeder once insured the life of | | | | premiums are generally three times what they |
| his prizewinning stallion for $100,000. After it died | | | | were normally paying. If a client complains that |
| suddenly, he promptly filed a claim for the loss. | | | | they can't afford to go elsewhere, some |
| When the insurance claims adjuster examined the | | | | insurance companies may offer to take them |
| horse, he found a bullet wound in its head. An | | | | back into their own high-risk sub-company at a |
| inquiry uncovered that the horse could no longer | | | | cost slightly lower than any other company would |
| sire offspring, so the breeder shot it, believing | | | | charge them. So, the client is now paying over |
| that he could collect the $100,000 of coverage. | | | | twice what they were before their coverage was |
| The insurance policy on the horse was for | | | | canceled. |
| untimely death due to health or accident. All the | | | | Something that makes clients even less likely to |
| breeder redeemed for his poor judgment was | | | | change insurance companies is when they own |
| what the slaughterhouse gave him. When you buy | | | | other forms of insurance with the same |
| insurance, it pays to understand what you're | | | | company. Company profits depend on those |
| paying for and how it works. | | | | millions of premium dollars continuing to flow in. If |
| As seen with the unfortunate victims of hurricane | | | | a client is paying for life insurance policies, and |
| Katrina, who were told that uninsured storm | | | | adding to IRAs and annuities, canceling everything |
| surge destroyed their homes, not high winds and | | | | and going elsewhere can be a daunting and costly |
| pounding rain, many insurance companies will use | | | | prospect. |
| whatever means are available to deny claims. | | | | The loss of a life insurance client isn't of primary |
| These companies didn't become multi-billion-dollar | | | | concern, because that immediately relieves the |
| corporations by being generous with their clients. | | | | company from the obligation of paying out |
| They'll find many excuses to keep the money | | | | thousands of dollars in death benefits, plus they |
| until the last possible moment. If one of the | | | | don't have to refund all the money that was paid |
| policyholders files a claim for an auto accident or | | | | in premiums over the years. Annuities and IRAs |
| some damage to their home, the claims adjuster | | | | are a different matter. Insurance companies have |
| is instructed to do whatever possible to disqualify | | | | a large portion of annuity capital invested to give |
| it. If there's no way to avoid paying, some | | | | them the maximum income on the clients' money. |
| companies give adjusters monetary incentives in | | | | So, to encourage clients not to cancel any of their |
| the form of a percentage of the claim to | | | | policies, companion discounts are offered on auto |
| negotiate the lowest possible payment. | | | | and homeowner's insurance premiums. It's an |
| Here's a good example of how the settlement | | | | incentive for even those paying for high-risk |
| process might work. A severe storm with large | | | | insurance to keep all their policies. |
| hail damaged a client's new roof. Instead of the | | | | The iron key that locks the golden handcuffs is |
| insurance company paying the full $5000 to | | | | that policyholders are too frightened to make any |
| replace the shingles, the claims adjuster convinced | | | | claims because it will cost them more to take |
| the client to accept $500 less because a tree | | | | their business somewhere else. They will just |
| branch had also fallen on the roof. The client's | | | | continue paying their premiums and hope that |
| homeowner's policy clearly stated that a tree | | | | they never have to make a claim. Plus, by having |
| hitting a house is considered an Act of God and | | | | so few clients making claims, the company will |
| isn't covered. The adjuster pocketed half the | | | | have to pay fewer bonuses to the accident |
| difference, or two hundred fifty dollars, as a | | | | claims adjusters. It's a sweet moneymaking |
| bonus for his extra effort to save the insurance | | | | machine that's greased with intimidation, and |
| company money. Of course, the company never | | | | enslaves the clients with their own money. |
| informs the clients of any recourse other than to | | | | So, how can you protect yourself against |
| accept whatever the adjuster offers them. If any | | | | unscrupulous insurance companies? Here are a |
| company employees tell their clients that they can | | | | few tips. Educate yourself! Carefully read all of |
| appeal their claim settlement to the state's | | | | your current insurance policies. Review your |
| Director of Insurance, they are likely to be fired | | | | coverage with your insurance agent or customer |
| on the spot. | | | | service department. Ask how claims are defined |
| You may ask yourself why anyone tolerates such | | | | and handled. Get competitive bids and claims |
| unethical treatment? Many insurance companies | | | | details on coverage from other companies. Call |
| take the broad, long-term viewpoint that | | | | your state's Department of Insurance to |
| ignorance and intimidation have intrinsic value. | | | | understand how they may help you if you have |
| When clients are confused and frightened enough, | | | | any type of dispute with an insurance company. |
| they don't complain or make claims, even when | | | | Your financial stability may depend on it. And |
| they're entitled to the money. Those who do file | | | | remember, you never know how good your |
| more than three claims in a three-year period on | | | | insurance company is until you make your first |
| either or both of their auto and homeowner's | | | | claim. |