Insurance is a valuable tool that allows people to distribute risk more broadly and prevent the financial devastation that can come with the various tragic and unpleasant situations that inevitably arise in life and business. Insurers in West Virginia (WV), and the WV insurance defense lawyers who assist them, know the importance of preventing and controlling financial losses due to fraudulent or unreasonable claims.
How Insurers and WV Insurance Defense Lawyers Work Together to Protect Us All
Insurance provides a safety net that prepares us for major financial hardships and prevents the burden of these misfortunes from falling on taxpayers. We learned with the successes of the privatization of WV workers' compensation that a for-profit insurance structure can be more effective at meeting the overall goals of insurance at a lower cost.
These successes, however, are dependent upon insurers' ability and willingness to actively work to mitigate losses and prevent fraudulent and unreasonable claims that are harmful to everyone in WV.
WV Insurance Defense Lawyers Help Insurance Companies Identify and Dispute Fraudulent Claims by Policyholders
The Federal Bureau of Investigation (FBI) reports that insurance fraud, not including health insurance, costs Americans more than $40 billion each year. This represents $400 to $700 in additional premiums paid by the average family to cover these costs. Common types of insurance frauds by policyholders include the following:
- False reports of accidents, theft, or loss;
- Staged fires or accidents;
- Storm fraud (reporting pre-existing, unrelated, or excessive damages);
- Overinsurance; and
- Exaggeration or inflation of expenses related to claims
Insurance companies, attempting to mitigate losses and reduce the costs for policyholders, typically have internal teams who perform fraudulent claims investigations. Some insurers hire in-house counsel to assist in the legal aspects of insurance fraud, while others retain or hire outside attorneys.
There are benefits to both internal and external legal representation, and the individual situation and needs of each insurer should determine the structure that best suits the business. Whether in-house or external, an insurance company's insurance defense attorneys should be extremely familiar with the many types of insurance frauds and experienced in fraudulent claims investigations.
Protecting Insurers and Policyholders
Insurance companies have a responsibility to guard against the various types of insurance frauds by policyholders. To do so is in the collective best interest of insureds. In some cases, insurers also have a duty to defend policyholders against unreasonable or fraudulent claims.
Failure to defend against claims that are covered under an insurance policy can result in bad faith claims against the insurer. The duty to defend and the tripartite relationship between the insurer, insured, and the attorney are complicated matters that are subject to the provisions of the policy in question and insurance regulations in WV.
Policy Structure and Insurance Regulations in WV
Many insurance companies agree with the wise adage of Benjamin Franklin that "[a]n ounce of prevention is worth a pound of cure." When policies are constructed with reverence to insurance regulations in WV, insurance companies, insured individuals and companies, and the collective group of insureds are all better protected from potential losses. Insurers also sometimes train policyholders in best practices to prevent incidents that result in insurance claims and lawsuits.
Insurers and WV Insurance Defense Lawyers Protect the Insurance System for All of Us
The insurance industry carries a heavy responsibility to the general public. Incidents and claims can be reduced and legal action can be prevented or mitigated by structuring policies according to insurance regulations in WV, training policyholders, performing fraudulent claims investigations, and defending against fraudulent and unreasonable claims.
Insurers and the WV insurance defense lawyers who advise them have a duty to protect the insurance system that safeguards us all. The attorneys of Jenkins Fenstermaker, PLLC have been working to protect WV's insurance system for many years. If you have questions or need legal counsel regarding insurance defense, call us at (304) 523-2100 locally or toll-free at (866) 617-4736, or complete our online contact form.