Historically, insurance companies were an efficient way to spread the risk of loss among many people, all of whom pay premiums into the system and each of whom would be compensated for a covered loss. Until recently, this system worked reasonably well. In the mid-1990’s, however, Allstate and other insurance companies adopted a new model aimed at maximizing profits. Since that time, insurance profits have skyrocketed into multiple billions of dollars per year.
How have these huge corporations achieved such success in the depths of an economic recession? By punishing customers who insist on receiving fair compensation, while providing prompt service to those willing to accept woefully inadequate settlement offers. This model, initially advanced by consulting firm McKinsey & Company for their client Allstate, calls for delaying claim resolution to force consumers into a tough decision: either file an expensive and time-consuming lawsuit or settle the claim for a fraction of its actual value.
This so-called “Good Hands or Boxing Gloves” approach has resulted in enormous profits, but ruined countless lives. In addition, this hard-line stance taken by insurance companies is responsible for perhaps thousands of lawsuits that would have been unnecessary had the insurers simply paid fairly under the terms of their insurance agreement.
It’s time to stop letting insurance companies get away with anti-consumer practices. Contact your State Representative and State Senator and insist they start protecting people over profits.
