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Insurance Law Blog

Tuesday, July 4, 2017

WELCOME TO THE "INSURANCE LANDMINES" SERIES

Welcome

Over my 26 (and counting) years of insurance law practice, I have been asked the following three questions countless times, always in this order, always with increasing exasperation:

  1. Am I covered?
  2. Why not?
  3. Why do I even buy insurance?!

This Insurance Landmines Series is designed to answer these and closely related questions. The short answer, however, is that the insurance transaction, from the design of the policy to the end of the very last claim, is littered with what I call “Insurance Landmines.” In short, these are the devices—unexpected and unforeseen by the policyholder—by which insurers delay, diminish, or deny coverage that the policyholder thought existed.

As you will see below, most of these Insurance Landmines are deliberately inserted into the insurance transaction by the insurer. Whether a given landmine was inserted dishonestly in a given case is something you must judge for yourself. Sometimes they are. But most Insurance Landmines are set out in plain view and either ignored or misunderstood by the policyholder.

This series will address Insurance Landmines that are inserted surreptitiously and those that are in plain view. More importantly, it will teach readers how to detect and effectively counter both kinds.

The Definition of “Insurance Landmine”

What is an Insurance Landmine? Why do I use that term? Is it drama, hyperbole, or what? And why would anybody choose such a disturbing metaphor?

I define an Insurance Landmine as follows:

 


“An Insurance Landmine is any word, phrase, or provision in an insurance policy, or any strategy or tactic of an insurer, that is intelligently designed and inserted into the insurance transaction to delay, diminish, or deny coverage."


 

Thus, while “Insurance Landmine” is a colorful metaphor, the term is neither drama nor hyperbole. To the contrary, it soberly and accurately describes the means by which policyholders are deprived of coverage they thought they purchased. As explained below, each word and phrase in my definition has been carefully chosen to help the reader identify and appreciate the devices by which this is accomplished.

Any Word, Phrase, or Provision in an Insurance Policy

This phrase reveals the primary method by which insurers delay, diminish, or deny coverage. It is nothing more or less than the carefully devised combinations of words, phrases, and provisions—the words chosen by lawyers and written down in black and white—that insurers rely on to their advantage.

Any Strategy or Tactic of the Insurer

This refers to the ever-evolving array of devices and schemes that insurers use to delay, diminish, or deny coverage. Some are obvious, some are flat devious.

That is Intelligently Designed and Inserted

This points to the overarching reality that Insurance Landmines are designed and inserted into the insurance transaction deliberately. They do not exist by accident. They are conscientiously developed, assiduously employed, and systematically improved over time by the insurance industry.

The Insurance Transaction

This phrase refers to the entire sequence of events and interactions that occurs between the insurance company and its customer. It includes the design, marketing, and sale of the insurance policy, and it encompasses all points of interface between the insurer and its customer from the customer’s first inkling of risk to the delivery of the policy, and from the tactics of the insurer’s claims department to the trial and appellate courts where judges and juries ultimately reveal the extent to which the Insurance Landmines have served their intended purpose.

To Delay, Diminish, or Deny Coverage

This phrase puts the spotlight on what insurers don’t want you to see. Despite their glib promises and happy talk, the overarching goal of any insurance company is to make—and keep—as much money as possible. Most of the time this goal is not advanced by paying claims quickly or in full.

But Why Call Them “Landmines”?

The Insurance Landmine metaphor will be offensive to some readers. It conjures visions of devastating surprise and injury.  Literal, physical landmines depend on surprise to accomplish their purpose. They are properly hated by all humankind. And that’s precisely why the metaphor was chosen. Insurance Landmines likewise depend on surprise to accomplish their purpose. Like their literal, physical counterparts, they are designed to lie secretly in wait until they have done their destructive work. There simply is no better term than Insurance Landmine to describe the means by which policyholders are unexpectedly deprived of coverage.

I Am Not Accusing Any Particular Insurer of Fraud or Criminal Conduct

I am not accusing any particular insurer of sharp practice, fraud, or criminal conduct but the insurance industry does have more than its share of bad actors, its overly ambitious, and its ethically challenged.





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