There are many insurance companies that go out of their way to make it appear that the company has your back and is on your side. They want you to feel peace of mind when you buy the insurance policy that if something happens, they’ll be there for you when you need it most.
But as many people discover, the insurance company is not there for you when you need it most. They may deny your claim. They may act in bad faith. They may try to offer you a lowball payout.
It’s important to remember that the insurance company is a business, and it is trying to make money. You are the consumer, so this means that the insurance company has a financial incentive not to work in your best interest.
Claims paid and expenses
There’s a general ratio used to figure out how profitable an insurance company is. It combines expenses and claims paid and then divides those by the amount of premiums that are brought in. If the ratio is under 100%, then the insurance company is taking in more in monthly premiums than it is paying out for claims and other expenses.
One way to affect this ratio, of course, is by getting new customers who will pay premiums. But the other way to do it is by denying claims to reduce the amount that is being paid out. From a mathematical perspective, it’s often best for the insurance company to reduce the amount being paid or to deny a claim entirely, helping the company earn more money.
For you, however, this means you may not feel like the insurance company is treating you fairly or giving you the payout that you deserve. At times like these, it’s important to understand what legal steps you can take.