When a policyholder is involved in an accident and makes a claim against his insurance company, he expects that the coverage he paid for will, in turn, compensate him for his injuries or losses. Unfortunately, more often than not, insurance claims are met by yards of red tape and bureaucratic stonewalling. Many people get so tired and discouraged that they wind up settling for much less money than they need, want, or are entitled to.
The harsh reality is that insurance companies are in it for profit. To a large insurer, issuing policies is not a matter of compassion or human interest, but one of underwriting, risk assessment, and profit margins.
Profit, in simplest terms, is the sum of all a person or company’s earnings, less the sum of all its costs, expenses, or losses. For an insurance company, earnings come from premiums paid by customers and the returns on investments made using those premiums. Losses, on the other hand, are the sum of its underwriting expenses and the payouts it makes in accordance with the policies it issues.
In other words, should you make a claim against your insurance company, you are essentially asking the company to incur greater losses. Is it any surprise that insurance companies throw up barriers to large claims, regardless of what their policies stipulate?
Hiring a lawyer can help you deal with your insurance company in three ways: