Insurance Companies Make Millions in Interest by Delaying Claims

This shouldn't come as a surprise- insurance companies are purposefully delaying payment of your claims. The reason for their delay is obvious, but it's something I find myself often explaining to clients. While my clients are disappointed by my explanation, they're certainly understanding.

This website shows how much each large insurance company
 earns by delaying claims: http://whyinsurancewontpay.com/

Everyday an insurance company waits to pay your claim, they earn interest on the sum of money they will eventually have to payout. If they delay across a million claims, the amount of interest they earn is HUGE. For example, Allstate - one of the worst offenders - earns 13 million dollars everyday it can go without paying claims. In just ten days, Allstate will earn over 135 million dollars by delaying.


Insurance companies are like banks. You deposit your money into them in return for a payout in the event you suffer a loss, but your money doesn't just sit in a vault until that rainy day comes. The insurance company takes the money and invests it, often into bonds. Those bonds and investments earn the company interest and profits. It makes sense then that they will want to earn as much profit on your deposit before paying it out.

My former professor, Jay Feinman, is an expert in this field. His book, Delay Deny Defend, breaks down the inner workings of an insurance company and explains how policyholders are affected by potential abuses. You can learn more about Professor Feinman and his book at http://www.delaydenydefend.com/.