The Alliance Of Law And Capital
August 17, 2019 10:56 AM   Subscribe

“Schmidt, a grandfather living on disability benefits from his war-related injuries, had no history of theft or fraud. But he found himself the target of an extraordinary alliance between private insurers and public law enforcement agencies — one that transforms routine claims into criminal evidence, premium-paying customers into suspects, and the justice system into a hired gun for a multibillion-dollar industry.” Insurance Companies Are Paying Cops To Investigate Their Own Customers (Buzzfeed News)
posted by The Whelk (23 comments total) 26 users marked this as a favorite
 
I know this is an ancient chestnut but fuck this country
posted by captain afab at 11:20 AM on August 17, 2019 [9 favorites]


gotta love this part:
These tactics can be applied with impunity, thanks to legislation in all 50 states restricting the ability of customers to sue insurers for wrongly accusing them of fraud — unless the customers can prove the allegations were malicious or made in bad faith.

The legislation was crafted with help from insurers, which worked to get versions of it passed across the country.
it's somehow reminiscent of both the qualified immunity doctrine that makes it so hard to sue cops (and other state officials) for rights violations, and the liability shield laws passed at the behest of the gun industry to prevent manufacturers and dealers from having to pay for any part of the costs their businesses externalize onto the rest of society.
posted by karayel at 11:39 AM on August 17, 2019 [17 favorites]


haha. everything sucks
posted by Bwentman at 12:26 PM on August 17, 2019 [7 favorites]


In 1988, I was a teenager insured by State Farm, and I was involved in a car accident: another teenager had pulled out of a side street and driven into the side of my car. He admitted fault, but did not have insurance information on him. He went to my school and claimed to also have State Farm, so I figured it would be no big deal. I gave his information to State Farm and assumed the matter would be taken care of.

State Farm came back to me with bad news: he wasn't insured by the company, and was likely an uninsured motorist, but they wouldn't fix my car or pay my claim unless I could get his insurance info or get him to admit in writing or call them to admit that he was uninsured. In the meantime I could get a repair estimate just in case.

It took me eight months to find him in my very large school (1200+ kids in my freshman class alone), get the school to tell me what his class schedule was, and confront him coming out of home room one day. During that time, I got State Farm to estimate the repair, and eventually paid to fix it myself; during that time, State Farm continued to insist he wasn't insured by State Farm and that they could not handle the claim as an uninsured motorist (I didn't have collision/comprehensive at the time) unless he admitted it to them.

When I confronted him coming out of home room, he acted very surprised, and said he thought it had been settled after it happened. He immediately pulled out his insurance card and let me write down all the info, including the start/end dates that covered the date of the accident.

I then called State Farm and asked: are you sure this guy isn't insured by you? They insisted he was not. I then gave them the kid's policy number, and the person on the phone said three words I will never forget for as long as I live, before hanging up on me:

"You got us."

About a week later, a check for the estimated repair amount arrived in the mail. Not long after, they cancelled me, and told my father that they would cancel him too unless he signed paperwork saying I would never drive his car.

Instead, he cancelled them and switched to Allstate, where he continued to have no accidents and no claims until the day he died.

So was I surprised to see State Farm's name in this article? Nope, and in fact I was expecting it before I clicked the link. Fuck those guys.
posted by davejay at 12:51 PM on August 17, 2019 [110 favorites]


Like a good neighbor... State Farm is there... spying on you, falsely accusing you of crimes, and bribing expert witnesses to lie about you...

This is one more example of why capitalism needs to die. And in the meantime...

Are there any legislative efforts to overturn or reform these laws? I hope this expose sparks or adds fuel to them!
posted by overglow at 12:53 PM on August 17, 2019 [6 favorites]


every so often liberals, centrists, and conservatives post this quote (thomas more as portrayed in a man for all seasons) as a critique of direct action, wildcat strikes, monkeywrenching, means-of-production-seizure, or even just standard civil disobedience:
Oh? And when the last law was down, and the Devil turned round on you — where would you hide, Roper, the laws all being flat? This country's planted thick with laws from coast to coast — man's laws, not God's — and if you cut them down — and you're just the man to do it — d'you really think you could stand upright in the winds that would blow then? Yes, I'd give the Devil benefit of law, for my own safety's sake.
and i am posting that quote here so that in the future i can remind those people that what we call the law is just a bunch of cops and that those cops are owned by rich men.

the law doesn’t block the wind. the law is the wind.
posted by Reclusive Novelist Thomas Pynchon at 1:22 PM on August 17, 2019 [26 favorites]


What if the profit motive is bad?
posted by Reyturner at 4:02 PM on August 17, 2019 [13 favorites]


Tax the insurance companies. Use the taxes to pay for both regulation of the insurance company AND robust fraud investigation [because insurance fraud is a real problem and affects costs for everybody insured -- insurers are not the only victims].

But law enforcement receiving money that can be provided or withheld at the discretion of parties that have a clear financial interest in the outcome of cases is an obviously bad idea -- so much so that the qualified immunity which protects police and prosecutors should either not apply or should be breachable if a complainant can make a reasonable case that the interests being represented are those of the insurers providing funding and not necessarily the public good.

(That said, I did not find the article all that compelling. Surely there are better examples out there, including possibly a way to connect cases to demonstrate a pattern of behavior. I had sympathy for the individuals whose cases were reported but wanted more evidence to be convinced that companies are intentionally abusing the system.)
posted by Nerd of the North at 4:27 PM on August 17, 2019


Imagine giving American insurance companies and cops the benefit of the doubt in 2019.
posted by Reyturner at 4:38 PM on August 17, 2019 [23 favorites]


Thank you for posting this. I don't understand how insurance can be a regulated industry and yet be allowed to behave like this.
posted by cynical pinnacle at 5:26 PM on August 17, 2019 [2 favorites]


That said, I did not find the article all that compelling. Surely there are better examples out there, including possibly a way to connect cases to demonstrate a pattern of behavior. I had sympathy for the individuals whose cases were reported but wanted more evidence to be convinced that companies are intentionally abusing the system.)
And in a 2010 criminal case in Pennsylvania, a judge became so frustrated with the testimony of an expert who seemed biased in favor of the insurance company that he threatened to refer him for prosecution for perjury.

The expert, hired by Erie Insurance, had opined that a faulty hair dryer could not have caused the fire that destroyed a policyholder’s home. But when the defense uncovered information suggesting it could have been the appliance after all, the expert went out of his way to side with the prosecution.

Experts “are supposed to be independent, notwithstanding the fact that they’re hired by one side or the other,” the judge said, according to the trial transcript. He admonished the prosecutor who was relying heavily on the expert’s testimony to make his case: “I want you to take your witness aside and tell him that no matter what the jury does, if I conclude, based on testimony, that he has not told the truth, I will advise the district attorney’s office to file perjury charges against him.”

Shortly afterward, the prosecutor dropped the charges. The expert, Richard Wunderley, and his employer, EFI Global, declined to comment.

A spokesperson for Erie Insurance said the company would “never knowingly work with an expert with a known bias or accused of perjury.”

Wunderley continues to provide expert testimony in insurance cases, and was recently named president of the Pennsylvania chapter of the International Association of Arson Investigators.
Can you explain how the fact that an investigator whose testimony was egregious enough to cause a trial judge to threaten to "advise the district attorney's office to file perjury charges against him" is not only not fired, but goes on to be elected president of a major state chapter of the International Association of Arson Investigators can possibly fail to convince you that there might be a pattern here?
posted by jamjam at 5:30 PM on August 17, 2019 [14 favorites]


Many years back I had a fight with an insurance company over some health claims (about 60 grand worth). Fuckers knew I was seriously sick and poor, so they stalled for months, and looked like going right on doing so forever.

Then a friend's wife, who was a long-time personal secretary for a senior partner in a high powered national legal firm, learned of my story and said give me the paperwork. She took it to her boss and said can I use our letterhead to force this along? Boss said sure.

Two weeks later, without any further ado, the insurance company rolled and paid in full.

The facts of the case had not changed, only the likelihood that the insurance company would be held to account.

Very much mixed feelings on that one. Definitely good to win and avoid bankruptcy, but equally not so good about what it took and just how arbitrary it all was. :-/
posted by Pouteria at 5:54 PM on August 17, 2019 [18 favorites]


> The facts of the case had not changed, only the likelihood that the insurance company would be held to account.

something i thought about while reading davejay's story upthread is that the correct play upon getting the insurance info from the other driver might have been to consult with a lawyer rather than saying anything to state farm. it may have been possible to bring suit against state farm in a way such that their actuarial tables or whatever would tell them to settle rather than fight.

but also, we're trained to see our relationships with private organizations — insurance agencies, employers, banks, etc. — as being mutually beneficial rather than fundamentally adversarial. we are taught that state farm is "like a good neighbor." really, when we enter into an ongoing relationship with a company, especially a company that provides something as significant as insurance, we have to go in with the mindset that it is not just possible but actually likely that we will have to at some point threaten legal action against them.

which, well, sucks. such constant anxiety. the paranoia gets worse after you realize that they're out to get you.

the best thing one can do, i guess, is to be as absolutely belligerent as possible, not in a silly "i am going to shout at insurance company customer service reps" way, but instead in an ice-cold serious "i am going to earmark a certain amount of money every year to hire lawyers to send nastygrams the second my insurer looks at me funny" way. a "i am going to plan to do this ahead of time and when the time comes i am going to do it without hesitation" way. but god no one has time or spoons for that, even if they've got the money for it.

if i ran the world... or if i ran the dsa... one of the things i'd make a priority is attracting fighty attorneys and raising money from the membership in order to pay those attorneys to be as belligerent as possible on behalf of people whose insurance companies and banks and lenders are abusing them. attorneys much more aggro (and ideally much less burdened) than most of the attorneys you find doing public interest law.

but also, lawyers are expensive. even for an organization the size of the dsa, and even though so many dsa members come from the professional/techie class.

tl;dr: aggressively defending one's rights is hard and exhausting and expensive and also if we don't do it we have no rights. the 21st century is a butt.
posted by Reclusive Novelist Thomas Pynchon at 6:23 PM on August 17, 2019 [16 favorites]


Fuck insurance companies.

I got rear-ended a few months ago and the lady admitted fault at the scene. The cops came and said they'd write a police report, but never did, and her insurance company adjuster said she wasn't returning their calls, so they couldn't pursue my claim.

It's now been months since the accident and I was not interested in letting this lady dodge her fucking way out of paying for my bumper repair.

One of my relatives is a lawyer (thank god) and helped me draft a letter threatening to sue and the insurance company sent me a check for the damage within a week.

You shouldn't need a fucking lawyer.
posted by marfa, texas at 7:55 PM on August 17, 2019 [8 favorites]


the best thing one can do, i guess, is to be as absolutely belligerent as possible, not in a silly "i am going to shout at insurance company customer service reps" way, but instead in an ice-cold serious... ...way
Reclusive Novelist Thomas Pynchon

That is the lesson I drew from it all: Let them know as early as possible in the proceedings that you are serious, take detailed notes, and have mastered the ancient and deadly bureaucratic art of collation and cross-referencing.

–––––––––––––––

but god no one has time or spoons for that, even if they've got the money for it.
Reclusive Novelist Thomas Pynchon

spoons ?
posted by Pouteria at 9:10 PM on August 17, 2019


Spoon Theory
posted by Homo neanderthalensis at 9:12 PM on August 17, 2019 [1 favorite]


I think a good law for insurance—including especially medical insurance, would be that if they deny a claim and end up having to reverse it and pay, they have to pay an extra 100% to the customer for each week the claim was denied. Then the “we’ll jerk them around until they give up” strategy would be a more even gamble, instead of entirely in favor of the insurer as it is now.
posted by Gilgamesh's Chauffeur at 9:23 PM on August 17, 2019 [16 favorites]


I blame Kafka.
posted by clavdivs at 9:23 PM on August 17, 2019


Spoon Theory
Homo neanderthalensis

Thanks.

––––––––––––

I think a good law for insurance—including especially medical insurance, would be that if they deny a claim and end up having to reverse it and pay, they have to pay an extra 100% to the customer for each week the claim was denied.
Gilgamesh's Chauffeur

I would like to see the costs to a business of any civil or criminal wrongdoing disallowed tax write-off status, so their bottom line is actually affected by it.

Also serious jail time for company execs for industrial manslaughter (if proven it was due to management negligence).

––––––––––––

I blame Kafka.
clavdivs

He was just the messenger.
posted by Pouteria at 9:41 PM on August 17, 2019 [3 favorites]


I'm in the UK and I was hit by another car. No one was injured, but I involved the police anyway.
The other driver was done for dangerous driving.
I eventually got the insurance details from the other driver and passed them to my insurance company.
The other insurance refused to pay up saying it was my fault.
I replied to the effect that they could take that attitude if they liked and I would see them in court as I was going to sue them both for the damage to my car AND for defamation of character and to please expect an official letter from my solicitor.

They immediately caved in and coughed up and also apologised for the personal comment.

I still lost my no claims bonus though as my insurance company (at that time) pointed out that even though they recovered all costs, I had made a claim and it is a NO CLAIM bonus, not a NO BLAME bonus.
I went to a different insurance company as soon as this was over and explained this story to them and THEY reinstated my NCD.
posted by Burn_IT at 4:51 AM on August 18, 2019 [2 favorites]


You see this is why I'm a Christian. It gives me great serenity to see insurance companies and law enforcement doing this kind of thing to innocent people, because I am confident there's an extra-white-hot wing in hell for people who victimize the innocent in these ways. Your karma is coming with extra tabasco, mother fuckers.
posted by allkindsoftime at 4:24 PM on August 19, 2019 [1 favorite]


Also, this reminds me of the first accident I was in on my motorcycle. I was splitting lanes, legally, 20 mph under the speed limit when a lady decided she couldn't be bothered to walk to the crosswalk and wait for the light, so instead she dashed through the stopped cars and appeared in front of me before I could stop in under 5 feet. Knocked her on her butt and she didn't even drop her coffee. Meanwhile my motorcycle has gone on its side, significant damage, and broken my big toe, but thanks to adrenaline I pick it up and move it to the side of the street after making sure she was OK.

She gives me her business card which says she's a General Counsel at a large health sciences company in SF. I knew right then she was going to try to fuck me, after I helped her to the side of the street, offered to call the police, gave her all of my information, you name it.

Sure enough, a couple months after I filed my claim, I get a letter from MY INSURANCE COMPANY telling me that they were finding me 51% at fault based on the other party's statement.

So I sent them the GoPro video from my helmet and told them they could get back to me with a new finding in the next 48 hours or I'd be giving the footage (of her breaking the law while I did nothing illegal) to the cops when I filed the case with them.

Next day they let me know they're finding the other party at fault. Moral of the story is unless you have video evidence of your innocence, even your own company will try to screw you. Even then, good luck.
posted by allkindsoftime at 4:34 PM on August 19, 2019


She gives me her business card which says she's a General Counsel at a large health sciences company in SF. I knew right then she was going to try to fuck me, after I helped her to the side of the street, offered to call the police, gave her all of my information, you name it.

Sure enough, a couple months after I filed my claim, I get a letter from MY INSURANCE COMPANY telling me that they were finding me 51% at fault based on the other party's statement.

So I sent them the GoPro video from my helmet and told them they could get back to me with a new finding in the next 48 hours or I'd be giving the footage (of her breaking the law while I did nothing illegal) to the cops when I filed the case with them.
Grrr.. I'd've asked for a copy of her statement and forwarded it to the ethics committee of the California Bar Association along with the copy of the video and a letter asking about their policy concerning making material misrepresentations in insurance claims. I wouldn't necessarily expect much satisfaction in the end but she should at least have a reason to think twice before pulling that kind of stunt again.
posted by Nerd of the North at 8:03 PM on August 19, 2019 [1 favorite]


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