Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Feb 9, 2020

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The American Association of Justice (AAJ) has released a report which highlights bad faith insurance practices by some of the nation’s largest insurers. It is entitled Tricks Of The Trade: How Insurance Companies Deny, Delay, Confuse and Refuse.

Denying and delaying claims

How do insurance companies deny and delay claims? Here’s what the AAJ had to say:

  • Denying Claims. The report highlights the tragic story of 60-year old Ethel Adams. While driving her car one day, a pickup truck crossed the centerline from the opposite direction and smashed into her car head on. She spent nine days in the hospital – with some of that time spent in a coma. Her injuries were severe and extensive and required months of rehabilitation. Her insurance company, Farmer’s, refused to cover her “accident” because the other driver’s conduct amounted to “road rage” and was therefore not “accidental.” The case garnered a great deal of attention due to Farmer’s “unusual” logic in failing to cover the claim and is an example of the lengths that insurance companies will go to deny valid claims.
  • Delaying until Death. The AAJ took a look at insurance companies such as Conseco and AIG and their bad faith practices of delaying claim payments. It highlighted the story of 77-year old Conseco policyholder, Mary Rose Derks, whose situation was featured in the New York Times last year. Derks had purchased a long term care insurance policy from Conseco so as not to be a burden to her children in her later years. When she had to go into a nursing home, Conseco allegedly did everything it could to delay the claim – leaving Derks and her family with thousands of dollars in unpaid bills.

Conseco wasn’t the only insurance company that has been accused of delaying claims. The report states that AIG, which was recently saved from bankruptcy by the government, is notorious when it comes to delaying claims. Former claims representatives have stated that AIG routinely locked claim payment checks in a safe and waited for customers to complain loud enough before releasing them – if at all.

The report summed up the insurance industry’s bad faith delaying tactics with a quote from Mary Beth Senkewicz, former senior executive at the National Association of Insurance Commissioners (NAIC) who said, “[T]he bottom line is that insurance companies make money when they don’t pay claims’They’ll do anything to avoid paying, because if they wait long enough, they know the policyholders will die.”

To view the report, go to the AAJ’s website at www.justice.org and click Newsroom and then Research.

If your insurance company has denied or delayed your valid claim, it may have acted in bad faith. Contact a bad faith insurance attorney to review situation. Consultations are free, without obligation and are strictly confidential.