What big insurance companies’ strategies mean to you and your family
The “McKinsey documents” are 150,000 internal documents from Allstate that reveal how major insurance companies use strategies designed to maximize profits by denying claims, offering inadequate payouts, and delaying settlements to force injured policyholders to accept less than they deserve. Since the 1990s, companies like Allstate, State Farm, and Nationwide have applied this business model developed by consulting firm McKinsey & Company. These tactics have led to accusations of insurance bad faith and inspired two books exposing the industry’s practices.
At GibsonSingleton Virginia Injury Attorneys, VA personal injury lawyers Ken Gibson and John Singleton know how insurance companies operate. John previously worked as a defense lawyer for large insurance companies, giving our firm insight into their tactics. Ou rGloucester bad faith insurance attorneys help clients throughout Eastern Virginia hold insurers accountable.
This guide explains what the McKinsey strategy means for your family, how insurance claims are supposed to work versus reality, why state regulators often favor insurers, and what you can do if your insurer is not being fair.
The way it’s supposed to work, and the way it works
You’ve always been told that insurance works like this: you dutifully pay your premiums each month; the insurance company invests that money; and when an unfortunate event happens (your house burns down, you’re injured in a car crash, etc.), the insurance company steps in and pays for the rebuilding of your house or your medical bills.
But information disclosed in the McKinsey documents (and testimony from insurance company ex-employees) describes an industry that, under the McKinsey strategy, seeks to make more money by denying claims, offering inadequate payouts, or delaying payouts. Delaying payouts or settlements puts policy holders in financial distress, and basically forces them to accept less money than they deserve.
What’s more, McKinsey’s recommended policies are typically enforced company-wide. Where local claims adjusters once had leeway in settling claims, many now must follow strict guidelines that limit how much they are allowed to award clients. So even if your Gloucester County adjuster wants to help you out, he or she may not be able to.
But isn’t the insurance industry regulated?
The insurance industry is regulated at the state level, but most state insurance departments are underfunded and understaffed. Plus, as Jay M. Feinman points out, “The regulators are closer to the industry than they are to consumers.”
Evidence of this can be found in the fact that, of the last 15 presidents of the National Association of Insurance Commissioners (NAIC), 11 have gone on to work in the insurance industry after leaving office. And there’s another reason that state insurance regulators tend to be chummy with the insurance industry: states make a lot of money from insurance taxes. So the more money the insurance companies make, the more money the states collect.
What can you do if your insurer isn’t being fair?
Our legal team at GibsonSingleton Virginia Injury Attorneys is all too familiar with how the insurance industry works. Before founding this law firm with my partner Ken Gibson, I used to work as a defense lawyer for large insurance companies—which means I know the tactics they employ, AND the kind of evidence they can’t deny.
My partner Ken is a former federal and state prosecutor with extensive trial experience. Together, we have the knowledge, experience, and tenacity to take on a big insurance company and ensure our clients get the money they deserve. We are also former Marines, and we bring that warrior spirit every time we go to court or speak with an insurance company.
GibsonSingleton Virginia Injury Attorneys is a community-based firm, and we consider it our calling to help our neighbors get through difficult times by standing up to insurance corporations who don’t have their customers’ best interests at heart.
If you’ve been injured in a car crash, don’t rely on your insurance company to take care of you. (We see a decent amount of bad faith from insurers in our area, and we work to hold them accountable.) Instead, call us at (804) 413-6777 for a free case evaluation. At GibsonSingleton Virginia Injury Attorneys, you pay no upfront costs. We only get paid if we win you the compensation you deserve.
