Insurance companies make their business under the guise of pretending they exist for the benefit of their policyholders. And, while they used to protect their policyholders, that’s no longer true. Once upon a time, insurance underwriters in America recited a powerful oath: “I shall strive to ascertain and understand the needs of others and place their interests above my own.” Today, that oath might as well read: “My company’s profits come before all else.”

Why? Because today’s insurance companies have in effect become investment bankers. They invest the proceeds received from policyholders’ premiums and receive huge sums back for their efforts. They are far more interested in the float rate on Wall Street than they are in the fair recovery rate for losses on Main Street.

“Insurance companies were originally founded to protect policyholders and they did just that,” says legendary consumer advocate Ralph Nader. “In colonial times, insurance companies were first formed to protect their policyholders’ homes from fire. Later they invested in research laboratories to test the safety of emerging 20th century technologies like steam boilers, building materials and electrical equipment. They had the safety of their insured at heart, but not any longer. Today the heart of their operation is purely profit driven. Keep payout costs low, deny as many claims as possible and invest the rest,” Nader says.

That’s one reason insurance companies rush to befriend you right after you file a claim so you will hopefully settle for as little as possible. Once you sign on the dotted line that’s it, it’s a done deal … no matter how much money you left on the table from unclaimed losses.

The truth is that after the shock of a loss, it often takes victims an extended time to access the true cost of all the damages — which they can seriously underestimate if given the “hurry-up” treatment. That’s why insurance companies press to settle claims quickly – they know the quicker the settlement – the more they save on payouts. Indeed, research studies have found that victims represented by an attorney recover substantially more money for their financial and emotional losses than policyholders who act alone.

The whole idea of insurance is to recover all that you have lost. Policyholders buy insurance for peace of mind and that sense of security. We want to know that, if something terrible happens, our financial futures are safe – that’s why we spend thousands of dollars a year on premiums. Unfortunately, that security is often nothing more than an illusion. It is no illusion, however, that some insurance companies routinely engage in bad faith when dealing with their policyholders.

As an example, consider this Utah Supreme Court case in which the Court imposed a penalty of over nine million dollars in punitive damages (in addition to special damages and compensatory damages) on State Farm Mutual Auto Insurance Company for the “reprehensible behavior” the company exhibited toward its policyholders.

In their judgment, the Utah Supreme Court wrote:

State Farm expressly assured the Campbells that their assets would not be placed at risk by the negligence and wrongful death lawsuit brought against them. The company then unnecessarily subjected the Campbells to the risks and rigors of a trial. State Farm disregarded facts from which it should have concluded that the Campbells faced a near-certain probability of having a judgment entered against them in excess of policy limits. When this probability came to pass, State Farm withdrew its expressions of assurance and told the Campbells to place a “for sale” sign on their house. These acts, all of which the Supreme Court conceded that State Farm had committed, Campbell II, 538 U.S. at 419, 123 S.Ct. 1513, and for which State Farm has not voiced so much as a whisper of apology or remorse, caused the Campbells profound noneconomic injury [emphasis added].”

While it would be nice to believe that State Farm’s actions toward the Campbells were aberrant to standard operating procedure, it simply isn’t so. Allstate Insurance Co. also frequently engages in the same sort of bad faith actions, according to the authors of From “Good Hands” to Boxing Gloves: How Allstate Changed Casualty Insurance in America. And, they aren’t alone. Similar cases are filed in courthouses across the United States every year.

Actions like those of State Farm, Allstate, and other insurance companies strip policyholders not only of economic protection and financial well being but also of their sense of security and their peace of mind. Apparently, while policyholders believe it is their duty to fulfill their contractual obligations and send in their monthly premium checks on time, insurance companies will do almost anything to escape fulfilling their end of the bargain. At, Ingerman & Horwitz we’re here to to hold big insurance companies responsible for their devious and deceitful behavior.  Contact us today.