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State Rep. Vicki Barnett: I'm probably one of the people that is, is most concerned about this from the standpoint of my profession; I'm a licensed insurance agent. And wrongful denial refers to a set of tactics that some insurance companies use to delay or deny legitimate property and casualty claims, auto and healthcare claims, and disability insurance claims, and they do it at the expense of consumers and the people who have paid their premium faithfully for many, many years. Insurance companies benefit by not paying consumers what they truly deserve and postpone- by postponing and rejecting legitimate claims insurance companies get to keep the use of the money that would go toward paying that claim and denying the consumer the relief that they need. In the words of former Allstate CEO Jerry Choate, quote "insurers can't make significantly more money just from cutting sales costs alone. The leverage is on the claims side. If you don't win there, I don't care what you do at the front end. You're not going to win." And that's a direct quote.

    And that's why insurance do the denial and delay tactics. To keep hold of the money and earn interest on it, and hope that the person who is insured will settle for less, sometimes pennies on the dollar, and that's how they make their gigantic profits. Unfortunately, the laws of the state of Michigan have been set up to reward these outrageous practices. We have books - we have laws on the books against insurance fraud on the part of the consumer and the insured, but we don't have it the reverse way. In Michigan, under current law, if a consumer's house burns to the ground, or a family is in a terrible accident, the first step is to turn to the insurance company, and often the insurance companies start out with an immediate denial, and the statement "We will investigate, and get back to you."

     Some consumers get very nervous about this and will accept anything so they can get back because they have no other cash coming in. If the insurance company does agree to pay, it can often be 2 years or more before consumers can get the help they were promised, and while consumers are struggling to get by in that time, the insurance companies are earning interest on the money that should be going to the insured. Some consumers face long-out, drawn… long drawn-out legal battles trying to recover what is rightfully theirs. They're afraid to keep pressing forward because the money for the trials comes out of their pockets, and their pockets are already stressed and emptied. And in Michigan there are currently no penalties for insurance that denay - delay or deny these legitimate claims, and the lack of protection for consumers encourages insurance companies to continue their practices. These lack of repercussions and… and lack of laws that protect consumers must stop now. Michigan is one of only four states that does not have consumer protections on the books to protect insurance.