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Chapter List

Nothing like a Good Neighbor
Which high-profile companies are committing the worst bad faith practices? This chapter dives into four of the worst offenders and examples of bad faith by insurers, including 1. State Farm and Hurricane Katrina, 2. Crumbling foundations in Connecticut, 3. Wildfires in California, 4. Chinese drywall problems in Florida
The Business of Risk
A brief history of the insurance industry, from its early foundations with Lloyd’s of London to Ben Franklin’s “Mutual Assurance” agencies, the development of insurance entities as a collective of individuals, and companies banding together to protect against risk none could handle individually. Early on, the concept was that the insurer does not make a profit but breaks even after premiums are collected and paid. However, that reality has changed.
How Greed Got to Insurers
How did things start to go bad in the insurance business? Contracts begin to become non-negotiable, heavily favored toward insurers. Owners and executives of insurance companies begin to look at them as a source of profits. This placed greater pressure on insurance adjusters to deny claims to allow for share price and executive payouts and bonuses to rise.
Acting in Bad Faith
As the insurance industry became greedy, it turned on its policyholders, rejecting claims where they were rightfully entitled to payment. The term for that kind of behavior is “bad faith. Chapter explores how insurers began to act in bad faith, i.e. Allstate and other companies choosing to deny almost all claims on theory only some would sue. Also explores the beginning of bad faith regulations and case law that developed to counteract bad faith. In many states, for instance, ambiguities in insurance contracts are interpreted by courts in favor of consumers.
Lobbying, Litigation and Arbitration: The Industry’s Weapons
Heavy influence of the insurance industry in the 1990s and 2000s into the judiciary and political systems (using their profits and resources to lobby for more insurance friendly laws and appointment of judges by governors, President, etc. that are more favorable toward insurance companies, beginnings of judicial decisions that are extremely pro-insurance, laws that are pro-insurance, such as the mandatory arbitration laws and use of those laws to make it financially infeasible to pursue claims against insurers). In this chapter, we explore insurers’ lobbying efforts, legal rulings, and laws that are pro-insurer.
What Happens When You Take Your Insurer to Court
Where is the industry going and is it going to start to change its image and actions?
The Insurance Litigation Landscape
What are some of the key rulings and controlling case law when it comes to insurance lawsuits? Here is a general look from a national perspective at how insurance lawsuits are fought.
The Insurance Litigation Landscape: California

Since insurance law is very state-based, this is a look at key rulings and laws specifically in California.
The Insurance Litigation Landscape: Florida
What does insurance look like in the Sunshine State? Here we take a look at how insurance laws are handled on the other side of the country.
The Insurance Litigation Landscape: New York
Rounding out the difference in state legislation around insurance law, it’d be criminal not to evaluate and understand how New York, one of the biggest states for litigation and insurance law, handles and processes its claims.
Health Care: Bad Faith at its Worst
For the most part, this book discusses the ins-and-outs of property & casualty type insurance and exposes how more often than not, your insurance company works for the shareholders and not for the policyholders. However, this is also extremely prevalent in the health care space, where insurance and bad faith is particularly galling. Detailed are the accounts of some of the very worst in health care bad faith insurance cases.
How Consumers Can Fight Back
Despite those acting in bad faith, there are strategies that allow one to overcome insurance domination of the market and pro-insurance laws. There are numerous strategies in litigation. Some discussed in this chapter include: Can use bad faith, adhesion, contract theory, use of internal communications to show intent of carriers obtaining policies, and training materials for adjusters.
The People On Your Side
A look at newer laws, court rulings, and consumer advocacy efforts to try to make insurance practices better, and fight bad faith.
How to Come Out Ahead: Tips and Best Practices for Consumers
What tips and strategies should consumers follow to guard against bad faith? What should they look out for in policy language that could be a concern? When should they talk to a lawyer? How should they go about finding a good insurance lawyer?
Conclusion
Where is the industry going and is it going to start to change its image and actions?
Printed from https://www.suttonhart.com/steve-hochfelsen/profits-of-denial/