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The insurance industry exposed

July 2007 | Volume 43, Issue 7

Putting profits over policyholders
David Ratcliff

Insurance companies regularly plead poverty, blaming trial lawyers, natural disasters, and even their own policyholders for their allegedly falling fortunes. But a look at their ledgers shows they have no right to sing the blues: The industry’s profits are skyrocketing, its executives are getting huge bonuses, and earnings have hit record heights—all while these companies deny coverage to their own customers for everything from Katrina damage to car crashes.

An insurer in the grip of greed
David J. Berardinelli

Allstate Insurance Co.’s phenomenal growth in profits is directly tied to its drastic reduction in claims payments: The insurer offers paltry sums for legitimate claims, counting on its customers’ unwillingness to slog through drawn-out litigation. That’s no dark secret or allegation. It’s a company policy called “Claims Core Process Redesign,” devised by powerhouse corporate consultants McKinsey & Co. Its bland-sounding name hides a relentless drive to maximize shareholder profits at the expense of Allstate’s customers.

Big insurers, dirty tricks

Day after day, Americans hand over their hard-earned cash to insurers who promise to protect them in case of an accident, illness, or liability claim. But just as often, these same insurers refuse to pay, hoping that frustrated customers will just give up on fighting for their rights—especially, that they won’t hire lawyers. Three attorneys talk about clients who refused to take what the insurers were dishing out, and the dirty tricks they uncovered along the way to justice.

Protesting insurer protective orders
Charles M. Miller

Insurance company defendants routinely ask for protective orders before turning over information about their processing operations, claiming these documents contain trade secrets. Plaintiff lawyers, almost as routinely, agree to the orders, not wanting to bog down the discovery process. But doing so can hurt your case and make it harder for other plaintiffs to prevail against the same insurer. Learn how to challenge a seemingly routine request for a protective order.

Features

Blame it on the Bee Gees
Robert S. Peck and John Vail

Somewhere in the 1970s, the country lost its collective mind and began believing the well-honed lies of tort “reformers.” Since then, the attacks on civil justice have been as persistent as a disco tune buzzing in your head. The Center for Constitutional Litigation (CCL) has been on the front lines, fighting for all Americans’ rights to redress in the courts. Two CCL lawyers offer a lively history of the “reform” war and describe three key fronts in the ongoing battle.

When air traffic is out of control
Jack London

Air traffic controllers have enormous responsibility for public safety. They also have—or are supposed to have—the tools, training, and experience to respond appropriately to emergency situations in the skies. When these systems break down, thorough knowledge of controllers’ job descriptions and an in-depth investigation can help you pin down just what happened in a crash—and who was responsible.