The shocking shooting of UnitedHealthcare CEO Brian Thompson in December 2024 has reignited debates about the ethics of the insurance industry. While the attack itself remains under investigation, it has shed light on long-standing grievances against insurance companies—particularly their tendency to deny legitimate claims to boost profits.
This issue extends far beyond health insurance. From auto insurers refusing to cover legitimate accident damages to homeowners insurance providers denying disaster-related claims, policyholders across the board face a common challenge: fighting their own insurance companies just to receive what they are rightfully owed.
Insurance Companies and Systemic Claim Denials
1. Health Insurance: Delays and Denials That Put Lives at Risk
A national survey found that nearly 15% of medical claims submitted to private insurers are initially denied. Even worse, over half (54.3%) of these claims are eventually overturned after multiple appeals, proving that many denials were baseless from the start.
The reason? Profit maximization. The more claims that are denied or delayed, the more money insurance companies keep in their pockets. Some insurers, like UnitedHealthcare, have been caught using AI algorithms to automatically reject claims, particularly in mental health and chronic illness cases.
➡ Example: A Senate investigation found that UnitedHealthcare used AI to deny mental health treatment claims at an increasing rate, leading to lawsuits and widespread backlash.
2. Auto Insurance: Lowball Settlements and Bad Faith Denials
Auto insurers are notorious for delaying, underpaying, or outright denying claims—even in clear-cut cases where policyholders should receive coverage. Many major insurers use tactics such as:
- Blaming the victim (even when the insured driver was not at fault).
- Disputing the severity of damages to reduce payouts.
- Denying medical claims by arguing that injuries were pre-existing.
➡ Example: In 2023, several major auto insurers faced lawsuits for using secretive software that automatically reduced repair payouts—leaving policyholders to pay out-of-pocket for accident-related damages.
3. Homeowners Insurance: Disaster Victims Left Without Help
When natural disasters strike, homeowners rely on their insurance policies to help rebuild—but many find their claims unfairly denied. Insurers often use vague policy language to:
- Claim that damage was due to “wear and tear” instead of a covered event.
- Underpay policyholders by disputing repair estimates.
- Delay the claims process until homeowners give up or accept a lower settlement.
➡ Example: After Hurricane Ian in 2022, thousands of Florida homeowners reported delayed or denied claims—forcing many to take their insurers to court.
Why Do Insurers Deny So Many Claims?
🔹 They make money by not paying out claims. The longer they hold onto premium dollars without paying, the more they profit.
🔹 They rely on policyholders giving up. Many people don’t appeal their denied claims, saving insurers millions.
🔹 They use complex policy language to confuse customers. Ambiguous terms make it easier for companies to justify denials.
🔹 They leverage AI and algorithms to increase denials. Instead of real people reviewing cases, automated systems reject claims at alarming rates.
Policyholders Deserve Better
The tragic death of Brian Thompson has sparked renewed attention on the insurance industry’s profit-over-people mindset. Across health, auto, and homeowners insurance, policyholders face an uphill battle just to receive the coverage they’ve already paid for.
It’s time for greater transparency, accountability, and legal protections to ensure that insurance companies fulfill their obligations—not just their profit margins.
Sources:
📌 How Insurance Companies Deny Claims for Profit
📌 Auto Insurance Companies Face Lawsuits for Lowballing Payouts
📌 UnitedHealthcare Used AI to Deny Mental Health Coverage