What you can do about insurance stalling tactics

It took six weeks to get a property settlement from State Farm insurance. Liability was not an issue, but the de minimis amount State Farm wanted to pay was a factor combined with the financial benefit of delaying paying out.

Insurance companies like all businesses and people try to delay paying out their debts. Every day they can keep the money in their investments is a day of greater interest that they earn on their coffers.

Unlike us when we delay paying bills, we are charged interest. Such interest charges often exceed the interest we would earn if we kept our money, in the case of interest charges on credit card bills. Other interest penalties for utilities are sometimes lower than what we could earn by leaving our money in the bank. However, our "credit" score gets impacted by such delays which in turn justifies higher interest rates charged to us as "risks".

What's the consequence to insurance companies for unreasonable delays? Nothing. There are cases where a situation such as paying for flooding when mold is accumulating can cause higher expenses for the insurer, but normally insurers have a way out...We didn't pay yet but we didn't tell you to stay in a moldy house until we paid. The argument is no different with health care....We didn't tell you not to get health care, we just said we wouldn't pay for it.

So what can consumers do about the delays? The most crucial thing to do is preserve everything in writing. Do not say good morning to an insurance person without confirmation (at least) in writing. The current climate in insurance is that representatives lie. Not twist, not spin, but out and out lie. This action is protected when consumers do not require their insurers to put what they say in writing.

I have been involved with the insurance industry for decades and writing is more important than ever. The reasons for this are as follows:

1) While insurance companies face few or no consequences for stalling and delaying, many insurance contracts provide for time periods within which insurance companies will respond. For instance, "most claims handled within 30 days". If you are talking to your insurer, it's your word against theirs and remember, insurance company employees lie. What is your response when the insurer asserts that it never got your claim? Well, if you called your insurer after mailing in your claim and asked for a fax number to fax in the claim, you've got a record of that fax date....thirty days and counting. If you did not and they assert they never got your claim you've got to remail it and the thirty days do not start until they acknowledge receipt.

2) Get it in writing: I still make mistakes because of the absolute brazen lying by insurers. I've called for "approval" for services only to have those services denied. I should have confirmed such coverage in writing but I did not and I was out the money when coverage was denied. I should have confirmed such approval through fax (insurers don't use much email) and I should have sent a general communication to the corporate website as an added protection.

3) Notify as many people within the insurance company as you can. Get a couple of fax numbers and send your faxes to both. When one claims it didn't get your paperwork, you still have the other one getting it. This reduces stalling because even if the liars claim something was lost, it is clearly their fault if it wasn't "lost" by someone else within the organization.

4) Notify your state insurance department. In these days they are very hands off, but at some point the regulations regarding insurance companies have to be addressed.

5) Your cause of action against an insurance company is not for Negligence, they owe us no duty of care and provide no duty of care. Your cause of action is for breach of contract, fraud.

So the most important thing is to preserve EVERYTHING in writing. Start the days tolling and be able to prove it. During my "experience" with State Farm I actually had one of the liars tell me that it was my insistence on writing that held things up...really? Except there was no acknowledgment of anything until we wrote it down, go figure, he lied.