My readers may not know this, but Michigan is one of only four states that doesn’t protect its consumers from some of the most underhanded practices in the home, auto and health care insurance industries – wrongful denial of benefits.
Wrongful denial consists of an intentional business plan by these companies that delay or deny legitimate property, auto or health care claims at the expense of the consumer. By not honoring their contractual duty to be there for consumers in their time of need, insurance companies boost their profits, forcing Michigan families into bankruptcy and even foreclosure just to care for the people they love.
The story of State Representative Mike Simpson is both heartbreaking in it’s brutality and typical in that I see this type of behavior daily here in Michigan. Why? Because in Michigan, if an insurance company acts wrongfully in denying claims, the only punishment is a $500 fine….
Here is Representative Simpson’s story:
State Rep. Mike Simpson: Representative Mike Simpson, and I don’t just stand in front of you today as a legislator, I also stand in front of you as a victim. I applaud these individuals for coming forward to publicly talk about a crisis and a tragedy in their life is incredibly difficult, and it talks a lot of guts. And your story… is my story. In 1993, my daughter was diagnosed with lung cancer, and within nine months I buried my daughter. And, I remember, on December 11th, 1993, looking at the MRI report with the diagnosis with the doctor because it was my birthday. And the doctor told me that she had a 3% chance of living. I picked up the phone, I called my insurance company, they said Mr. Simpson, don’t worry, we’ll take care of you. Boy, did they take care of me. I soon found, that I was in the fight of my life not only trying to help my daughter fight off a disease that was most assuredly going to take her life, I was also fighting my insurance company because they didn’t want to pay the bills. They’re your best friend in the world when you make your premium payments, but when you have a claim you’re the enemy. It’s just wrong. That’s why I ran for office the first time. I never wanted to see this happen to another family. These are not isolated circumstances, they happen hundreds of times all across this state every single day. And the people standing behind me, they put a human face on the reality of what we always kind of look the other way, it didn’t happen to my family so we don’t worry about it.
During that nine-month fight, I sold everything I owned. You’d sell your soul to save your child. But it wasn’t enough, and ultimately it bankrupted my family, it crushed us. Our American dream had turned into an American nightmare, and after my daughter’s death I found myself standing in front of a federal bankruptcy court judge, detailing how many pieces of clothing and toys my other two surviving children own, and could we please keep them or did we have to give them to the creditors too. It’s time to put consumer back in consumer protection in the State of Michigan. It’s that simple. You know if we enter a contract or make a promise we have to keep it. If we commit fraud and break the law, we go to jail. If the insurance company does it, they get a slap on the hands from the insurance commissioner and they got to pay 500 bucks. To most of these CEOs, that’s a missed lunch or a golf date, that’s it. For the main purpose of making sure their bottom line looks better, they destroy lives in a heartbeat and never look back. And this is only one of four places in this country that you can do that. Michigan, Massachusetts, Louisiana and Nebraska and that’s it. We’re the disgraceful part of the Final Four, and today the House Dems are saying no more.
The State House here in Michigan has drafted a series of bills that will protect consumers from this type of behavior by insurance companies here in Michigan.
The bills include laws that would:
* Strengthen consumer protections by punishing insurance companies that wrongfully deny consumer claims with penalties, including a $1 million fine.
* Punish corporate leaders who knowingly create, foster or encourage wrongful denial of claims by making the misconduct a felony that could result in four years in prison plus a $50,000 fine.
* Create a whistle-blower protection plan to shield employees who report that an insurance company is engaging in wrongful denial of claims.
In auto accident claims, the wrongful denial of valid medical claims is rampant. It has even prompted investigations by numerous media outlets here in Michigan.
If you believe that this type of behavior must be corrected, click here to sign a petition to learn more and show your support as a consumer here in Michigan for increased protection from these predatory practices by insurance. No more profits over people. It’s time for a change.