How to stop insurance companies from making hugh profits and start paying claims without hassles?

Question

Everyday you hear about new ways that insurance companies are denying claims. How can they be stopped?

Answer 1

Most insurance companies do not make huge profits. In fact, many of them are not-for-profit. Health insurance is a heavily regulated industry. If you feel that a claim has been denied inappropriately, you can appeal it with the insurance company or go the your state's insurance commissioner.

Answer 2

The problem isn't as much that insurance companies are being monsters that deny claims. The problem is that it is too easy to get gigantic "settlements" from insurance companies which forces them into trying to cut costs in other ways. If you want to lower your insurance rates, curb the class action lawsuits and push your senators into tort reform that makes insurance fraud more difficult. With better profits and lower fraudulent claims being paid out, the companies would be much more lenient on paying claims and would be much more likely to lower their premiums.

I realize that this may not be the answer you are looking for, but unfortunately, a lot of people do not understand the insurance industry except for what they see in the movies about the big bad insurance companies that squash the little guys dreams.

I should also specify that Insurance companies do NOT make very good profits at all! Insurance companies typically break even at best with the amount of claims paid out versus amount of premium collected.

Answer 3

Unfortunately, it's true that insurance companies are not making huge profits. Premiums are as low as possible - they have to be to compete. All legitimate claims are paid according to the contract - they have to honor legal contracts. Also, insurance is heavily regulated and audited by both state and federal agencies. I've been on the receiving end of these audits and I promise that they are painfully thorough. No insurance company makes profits from premium payments - they are lucky to break even. Insurance companies make their money from investments - and even that is regulated by state and federal agencies that require conservative investing. It's only in movies or from plaintiff's attorney TV ads that you hear about the big, bad insurance companies denying valid claims. It's hype.

Answer 4

mbrcatz is right. I have no idea where you got the idea that insurance company profits are sky-high. Take a look at Humana Healthcare, if you want an example. Out of every dollar they took in last year, a paltry 2.1 cents was profit.

They could do better putting their money in a passbook savings account.

Claims are NOT denied improperly, for the most part. Sometimes errors are made in coverage, but in general, insurers follow the contracts which they have with clients to provide payment for losses.

The REAL problem is that folks (maybe like YOU) think that insurance covers EVERYTHING. It doesn't. It only covers what is in the policy for which you pay.

Answer 5

OK, they don't make those huge profits you think they make. If you DO think they make huge profits, buy their stock.

I've NEVER had a real claim declined. Most of the claims that are "hassle" claims are when the claimants arent' doing what they are supposed to do.

Most insurance companies pay out more than they take in, in premium dollars. For personal lines insurance, it's about $1.10 paid out, for every $1 the customer pays in.

IF you want insurance companies out of your life, so you're not contributing to their "profits", and don't have claim hassles, don't buy insurance. You don't HAVE to have a car, you can pay cash for your house, there's NO insurance you're required to have, unless you AGREE TO IT BY CONTRACT. Like, wanting to drive on public streets, or borrow money from someone.

Answer 6

If they weren't running a profitable organization, I wouldn't buy insurance from them for fear they couldn't pay out on my legitimate claim.

You hear about all this crap because it is the media's job to keep you glued so they can sell advertising. Apparently it works very well. This morning I heard that vitamin C doesn't reduce illness. Of course it's only one study and who knows anything about the controls. That's not science, but it is news worthy.