The American Association for Justice released two reports about the tactics insurance will try to use to avoid paying their policyholders despite them paying premiums for in case bad situations occur or undercut policyholders on what should receive. The first report titled, Pattern of Greed 2007, focused on the actions some insurance companies used during the aftermath of Hurricane Katrina against people who had claims because of the damage to their property. According to the report, Katrina caused an estimated $135 billion in damages. The damage left by the storm was shown worldwide and captured the attention of the world. The storm took place right after the Tsunami in Sri Lanka, where the world responded with supplies and personnel very quickly. Hurricane Katrina seemed to catch many government and emergency personnel off guard especially in New Orleans. After the immediate aftermath, the hard work of rebuilding was to begin and claims needed to be paid for that to commence. However, insurance companies started to push back and slow down the claims process. In the report, insurance companies are said to have “promoted” the flood damages angle and not wind damage because they wouldn’t be responsible for paying flood claims. In addition, the insurance companies would publish misleading statistics where they touted paying 90% of claims. Statistics which were disputed from government officials and policyholders. Some of the biggest companies in the insurance industry were named in the report. Companies like Nationwide, State Farm, and All State all had incidents where they denied policyholders what was owed to them.It is even claimed in the report some companies committed fraudulent actions to avoid paying their policyholders. The historical practices of the insurance companies is also mentioned in the report as well as their donations to different politicians.
The American Association for Justice’s second report was titled How Insurance Companies Deny, Delay, Confuse, and Refuse. That report was more of a general overview of how the industry avoids keeping their end of the bargain. Generally, people get insurance to protect their property against any foreseen or unforeseen disasters. It is pitched as a hedge because no one knows what damage a storm or the after effects of a storm will do property. Insurance is sold as a peace of mind for the policyholder. However, according to the report, insurance companies actively deny valid claims, discriminate over credit scores, delay payment, and confuse policyholders. In this report, AAJ published first account testimonials from people in these kinds of situations with insurance companies. To end the report, they offer advice to anyone with insurance: Know your policy, Fill out the forms carefully, Don’t cash premium refund checks, Put everything in writing, Contact your state insurance department, and Don’t give up.