How Insurance Companies Defraud Their PolicyholdersÂ
What Courts and Legislators Should Do About It
“By its very nature, fraud involves concealment and is difficult to detect. The overwhelming majority of victims of fraud do not even know that they have been defrauded when an insurance company denies their claim or cancels their policy, and have no recourse.”
Abstract: Insurance companies have legitimate reasons for denying claims, but sometimes denials or significant delays are the result of unfair practices or even fraud. Such actions may be systemic or undertaken by an individual. What rights do policyholders have? What can they do to combat illegitimate denials? What are the barriers individuals face when they are wrongfully denied coverage? Should there be a private right of action under the Unfair Trade Practices Act? Should policyholders’ attorneys’ fees be covered? What should courts and legislatures do to protect insurance consumers? In this article the authors answer these questions and more.