Handling Insurance Disputes
At Beasley Allen, we have experience counseling clients in many insurance disputes, including policies for business, life, property, disability, health care, rental cars and more. We hold insurers accountable for engaging in unethical and illegal schemes such as racial discrimination or artificially inflating premiums for unhealthier people by putting them into high-risk groups so they “price out” of the market, often called “death spiraling.”
We have also filed many class-action lawsuits against national banks and major insurance companies for their combined fraudulent conduct in the sale of annuities.
If you feel your insurer engages in deceptive or fraudulent behavior or acts in bad faith, our nationally recognized insurance fraud attorneys could help you seek justice. We recognize the red flags of insurance fraud, criminal conduct and other forms of wrongdoing that often occur in the insurance industry.
Racial Discrimination in the insurance industry
From the 1930s until the late 1970s, at least 30 insurance companies engaged in the shameful practice of charging “race-based insurance premiums” on so-called “burial policies” and/or “industrial life policies.”
This reprehensible practice charged African Americans higher insurance premiums based solely on the color of their skin. Many companies engaging in race-based insurance schemes further compounded their wrongdoing by undertaking sophisticated measures to cover up their misdeeds.
Beasley Allen has settled more than 10,000 claims involving race-based insurance premiums. We continue to lead the nation in this area of the law for those who wish to opt out of the class action lawsuits that often offer minimal benefits to certain policyholders compared to the potential recovery they may receive by filing their cases.
What is ‘death spiraling’ in health insurance?
Insurance companies consider age, family history and lifestyle when setting health insurance premiums. Depending on those factors, they place policyholders into similar groupings for premium pricing.
Sometimes, insurance companies engage in a practice called “death spiraling.” Certain policyholders with high-risk conditions like heart disease, organ transplants, cancer, kidney disease or a smoker may pay more for coverage. These policyholders are placed into a “high-risk” group.
In “death spiraling,” a company will move their unhealthy policyholders from their original risk group to another risk group with all or a greater number of unhealthy policyholders. By doing so, they justify higher rate increases for the group. The process continues until the insurance company can “price out” and rid themselves of the high-risk policyholder. In this way, they ensure only healthy people who file small or few claims.
Death spiral schemes have left thousands nationwide without health insurance because they cannot afford the artificially inflated premiums. Our firm was one of the pioneers in this area of law, and we continue in that leadership role as we pursue these cases throughout the country.
Bait and switch in insurance disputes
Similar forms of fraud have occurred in the sale of nursing home policies, home health care policies and long-term care policies for the elderly. These policies employ a “bait and switch” method. Such policies are sold at “actuarially defective” prices (too low a premium to sustain the policy). Then, the premium is “hiked” so high in the following months and years that the policyholder can no longer afford it.
Tragically, insurers engaging in this form of insurance fraud will “hike” the premium on an elderly person’s policy when they need it the most.
What does ‘Bad Faith’ mean in insurance disputes?
Bad Faith can be the action of an insurance company when they intentionally deny payment of a claim without reason. This can involve health, life, accidental death, disability, credit, automobile, property or cancer insurance.
We have represented clients in pursuing cases against insurance companies participating in bad faith practices, with specific attention to “own occupation” disability policies. These policies pay a benefit if you cannot perform the substantial duties of your regular occupation or profession.
Our independent investigation of the insurance industry’s practices in evaluating and refusing to pay some of these claims is shocking. Further discovery has unveiled boardroom decisions to engage in a company’s schemes to wrongfully deny benefits to policyholders, all in the name of profit.
Sale of Annuities Fraud
An annuity is a contract between you and an insurance company in which the company promises to make periodic payments to you, starting immediately or at some future time. You buy an annuity with a single price or a series of payments called premiums.
Some annuity contracts provide a way to save for retirement. Others can turn your existing savings into a stream of retirement income.
As a result of recent banking deregulation, banks are now allowed to sell insurance products to their customers. Sometimes, banks join insurance companies to underwrite these products. Subsequently, some of these insurance products are being sold based on blatant misrepresentation, especially concerning the explanation of how these insurance products perform.
We have filed numerous class action lawsuits against national banks and major insurance companies for their combined fraudulent conduct in the sale of annuities.
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