Tampa Insurance Lawyer :: Insurance Disputes :: St Petersburg Bad Faith Offer Attorney: "WHY DO INSURANCE COMPANIES DO IT?
'Why do insurance companies do it when they are so 'warm and fuzzy' in their advertisements? I thought I could trust my insurance company.'
Remember the one reason insurance companies exist: to make profit. Remember the one reason to advertise: to get you to give them profit.
Over the years, the insurance industry has developed practices designed to delay and deny coverage. The benefits from these practices are two-fold for the insurance companies and we all need to be aware of them:
Individual adjusters often save thousands or tens of thousands of dollars per claim by tough negotiations with their insured. With thousands of claims per month, the financial gains for a large insurance company is well in the millions or tens of millions of dollars per month.
The second benefit of the insurance company tactics involves the 'time-value' of money. If a company can delay paying a large claim for six months to a year, it can have that money it will eventually pay out invested, and can often make thousands of dollars on that money during the delay. Again, multiply this profit by the thousands of claims per month and you have millions of dollars in profit."
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