Craig Matteson says:

Jay Feinman teaches insurance law at Rutgers University. As you read this book you will become convinced that he knows what he is talking about. However, as you read along you will also see that he is writing from a particular viewpoint and that he is an advocate for a certain position rather than a balanced analyst of the issue of insurance claims payments. While he admits in passing that the vast majority (read almost all) insurance claims are paid promptly and without any delay, denial, or lawsuit, this book makes a big mountain out of the relatively small number of claims cases that are, indeed, handled badly by the insurance companies. They are colorful and heart rending anecdotes, but we never get any context for the percentage of claims they represent. And while Feinman paints a picture of rapacious insurance companies he never shows us how big a problem the insurance companies face from rapacious customers making fraudulent claims.

His basic thesis is that when you bought your health, home, and auto insurance from the old style mutual insurance companies they paid what they owed and used talented claims adjusters to meet those payment obligations fairly while balancing company responsibilities and interests. Then the insurance companies became public corporations and their need for ever more profits pushed them to totally revamp their business. They brought in McKinsey and Company who completely revamped that way insurance companies operate including turning claims into a profit center.

They did this by turning to expert systems and replacing experienced claims adjusters with people who basically entered data into the computers for those expert systems. They also extended the float by slowing down the payment process, denying more claims, offering less for the claims to be paid, and going to court even for small claims in order to raise he costs for anyone resisting the lower payments offered. To the extent this story is true, and I have little doubt it happens at times, it is awful and customers need to punish these companies by taking their business elsewhere. A friend of mine in the insurance industry told me that in his decades in the business he is utterly unaware of this practice. I believe him because I know him and his integrity. However, it is a big industry and I am sure there are some rotten apples out there.

Feinman also decries the way insurance companies are debasing the legal profession in the claims process. You would think that lowering legal expenses would be good for customers, but Feinman says it harms claimants because they would get, on average, twice as much from the insurance companies if they were represented by good legal counsel. OK. I have no idea if this is true, but I do know that good legal counsel costs a huge pile of cash, too. So, what is the real net in time, cost, hassle, and stress for the average person who doesn’t want to go anywhere near a courtroom and just wants to get on with their life?

The author does urge us to take more time investigating our insurance purchases, to be more careful in getting coverage that fits our real needs, and that we take the time to be completely aware of what is being covered and what is not covered in our policies. Getting the wrong policy for a low price is no bargain when you need to make a claim and find out what you lost is not covered. This is great advice. And to the extent that reading this book will make you more cautious and aware of your insurance needs and purchases, I think it could be very valuable to you.

However, in the end, he offers a solution to this problem. Can you guess what it is? Ready? Let’s say it all together: ***More Government Regulation!*** Gack. That can’t screw anything up can it? Regulation is what makes most legal contracts and insurance policies harder to decipher than the Venona papers without a key.

Reviewed by Craig Matteson, Ann Arbor, MI

Rating: 4 / 5