The prospective client called and asked if we would meet him at his business. “Of course”, I said, since we advertise that “we will come to you”. Upon arrival, we asked to see “Jim”. (I use that name for confidentiality and I once heard a story about a mule named Jim)
Prospective client “Jim” came walking out, from behind his counter. He had a sledge hammer in his hand. That caught my attention and I half wondered if he thought that was how to negotiate a legal fee. He asked if we wanted to see his car first, before discussing the case. We followed him to the parking lot. Then, he began to raise the sledgehammer toward the car bumper and asked how much damage we wanted to his car, “to make the case worth more”.
Needless to say, except for the frightening memory of that event, I have no other story to tell about that case, as we quickly found ourselves travelling down the highway, without a client. I left him, his case and his sledgehammer behind.
The Virginia State Police are running a full page advertisement in the newspaper that honors eight of Virginia’s top fraud fighters. Each of the recipients of the Fraud Fighter Awards have taken some action to stop insurance fraud. They correctly state that, ultimately, everyone pays a price for insurance fraud. That’s why, when I see a mention of insurance fraud, my mind goes back to that sledgehammer story. I wonder if “Jim” is still out there. I suspect that he got rewarded in a way that he didn’t expect.
Conversely, when I see campaigns against insurance fraud, I wonder why there is no mention of insurance companies or adjusters, who have committed fraud this past year. In my experience, it’s not just a one way street. Collecting premiums, with an intent to figure out a way to keep from making payment to the insured, also constitutes fraud.
Virginia has a code section (8.01-66.1) that deals with insurance companies that deal in bad faith. In my practice, I see it. For instance, I recently submitted different medical payment packages to the same insurance company, on behalf of different clients. The packages included the full billing, coding and all information relating to the treatment. In fact, the coverages were the clients’, since these three carried medical payment coverage on their car insurance. Medical payment coverage is an elective coverage that costs a small extra premium, to help pay medical bills resulting from a car crash, without consideration as to who is at fault.
In these submitted packages, a form letter came back that basically said something to the effect that no payment was forthcoming, until all information about the bills was submitted that related to when the treatment occurred and what kind of treatment was included. Of course, these original packages had correctly included such information. This insurance company apparently had come up with the idea to delay payments by sending out these “we need more information” letters.
I wrote a form letter response to the three different adjusters that had sent these form letters. I reminded them of the package that had been sent, that had included all the information that had been requested in the “delay payment letter”. My letter may have also said something about preserving all evidence and their file, so I could document their bad faith handling, at a later date. I might have even sarcastically asked for the middle initial of the adjuster on the letter, so I could make sure that the “fraud plaque” I was sending, would properly show the full name. OK, maybe I’m getting a bit revved up. Imagine, full payment checks showed up within 7 days, without any other explanation.
The point of this blog is that insurance fraud is bad. It hurts deserving clients and it logically causes premiums to increase. However, I don’t think that insurance companies should get a free pass on their conduct either. A quick google of insurance bad faith brings up a lot of examples of insurance companies not acting in good faith. As I have said in a few prior blogs, the fight continues! I wonder what ever happened to Jim the Mule?