Michigan's Democratic Lawmakers Fight Back Against Insurance Giants Who Wrongfully Deny Claims

It’s painful enough to endure an injury or disease: the recovery time can be long, you may lose out on time with your friends and family, and all you want to do is get better. But what happens when you can’t get needed medical treatment or therapy to get back up on your feet because your insurance company denies your claim? For many injured or sick people, it means going without or paying for the treatment out-of-pocket.

Not if Democratic lawmakers have anything to say about it. In fact, Michigan House Democrats are striking back at Michigan insurers who purposely deny or delay legitimate claims filed by consumers: they are unveiling legislation today aimed at toughening the penalties against insurance companies—up to $1 million fines for companies who wrongfully deny claims. State Democrats also stated that the bills could result in prison time and fines for the corporate leaders of insurance companies who encourage the wrongful denial of claims.

People with brain injuries and a whistle-blower who worked in the insurance industry recently attended a Lansing-area press conference with Democratic legislators. Several individuals who suffered head injuries after auto accidents told of their financial woes after their insurance companies refused to pay for needed therapy. Moreover, the whistle-blower, Jo Anne Katzman, who worked for Allstate for two years prior to quitting, revealed that co-workers received prizes for denying or sending claims to a “special investigations unit”. She went on to say that she quit because she did not feel right denying claims when she knew they were legitimate.

According to House Democrats, Michigan is one of only four states without strong legal remedies for policyholders who are denied claims.