Insurance is supposed to be a safety net, but when you need them, it feels like they are more interested in protecting their bottom line than protecting you. While AI can offer several ways to make life safer, it can also be used to make getting fair compensation for an injury or wrongful death claim.
Here’s a breakdown of strategies insurance companies might use A.I. to reduce payouts, along with what you can do about it.
1. Automated Claim Adjustments: AI’s Fast but Flawed Assessments
Insurance companies are increasingly using AI to assess damage from photos and documents, speeding up the claim process. However, AI algorithms might underestimate damage or miss crucial details, leading to lower settlement offers. Given their past history, there’s serious concern that efficiency and cost-cutting are prioritized over fairness.
Example: After a car accident, you submit photos of the damage. The AI estimates $1,000 in repairs, but your mechanic finds hidden frame damage costing an additional $2,000.
How to fight back:
- Get a second opinion: Always get your own independent assessment of damage from a trusted professional.
- Document everything thoroughly: Take detailed photos and videos and keep all receipts and communications.
- Don’t rush to settle: Don’t feel pressured to accept the initial offer.
2. Fraud Detection and Profiling: When AI Flags the Innocent
AI excels at detecting patterns, which is useful for fraud detection. However, it can also lead to false positives. Your claim might be flagged as suspicious based on irrelevant factors, leading to increased scrutiny or denial. There are worries that AI is being used to create “high-risk” profiles based on demographics, leading to biased claim handling.
Example: You file a claim for a back injury, and the AI flags it because you live in an area with a high rate of similar claims, even though your injury is legitimate.
How to fight back:
- Be prepared to provide additional documentation: If flagged, be ready to provide thorough medical records and any other information to support your claim.
- Know your rights: Understand that you cannot be discriminated against based on demographic or socioeconomic factors.
- Seek legal counsel: If you feel unfairly targeted, consult with an attorney.
3. “Black Box” Algorithms: Errors and Bias
Many AI algorithms, especially deep learning models, are “black boxes,” meaning their decision-making process is opaque. This lack of transparency makes it difficult to challenge claim decisions based on AI, as the reason behind them is unclear. This lack of explainability can obscure potential biases or errors in the AI system.
Example: Your claim is denied, and the insurance company states it’s due to the AI’s assessment, but they can’t explain how AI reached that conclusion.
How to fight back:
- Demand transparency: Insist on a clear explanation of the reasons for the denial.
- Escalate the issue: If you don’t receive a satisfactory explanation, escalate the matter to a supervisor or the company’s compliance department.
- Consider legal action: If necessary, consult with an attorney to explore your legal options.
4. Data-Driven Claim Reductions: Finding Reasons to Pay Less
Insurance companies can use AI to find specific data points that may correlate with lower payouts. This could be things like what type of medical professional you see or where you live. These data points may have nothing to do with the severity of your injury but still be used to lower payouts.
Example: Your payout is reduced because you saw a chiropractor instead of a medical doctor, even though chiropractic care was necessary and effective for your injury.
How to fight back:
- Challenge irrelevant data: If your payout is reduced based on factors unrelated to your injury, challenge this with supporting documentation from your doctor.
- Focus on the facts: Emphasize the severity of your injury and the necessity of your treatment.
- Seek expert advice: Consult with a medical professional or legal expert to support your case.
5. Social Media Analysis: Watching Your Every Move
Insurance companies may use social media information when determining claim validity. AI can automate the process of sifting through social media posts to find information that contradicts your statements.
Example: You claim a back injury, but a photo on Facebook shows you playing a lighthearted game of volleyball. The insurance company uses this to argue your injury isn’t as severe as you claim.
How to fight back
- Be mindful of your online presence: Avoid posting anything that could be misconstrued.
- Limit your privacy settings: Make sure your social media accounts are private.
- Context is key: If something is taken out of context, be prepared to explain the full situation.
6. Delaying Tactics: The Waiting Game
Insurance companies have used the delay tactic for paying claims, especially ones dealing with injuries since they began selling policies. A.I. can devise even better tactics for delaying claim payouts on a case by case basis in seconds. It can come up with ways to delay or deny claims, or knowing the victim’s economic wherewithal, slow roll their settlement offers hoping you’ll become desperate and accept a lower settlement. This can involve slow responses, requests for unnecessary paperwork, or failing to act promptly on your claim.
Example: The insurance company takes weeks to respond to your calls, constantly requests more documentation, and stalls the process, making it difficult for you to get the money you need for repairs or medical bills.
How to fight back:
- Document everything: Keep a detailed record of all communication with the insurance company, including dates, times, and the names of people you spoke with.
- Know your state’s laws: Familiarize yourself with the time frames within which insurance companies are required to process claims.
- Escalate and file complaints: If the delays are unreasonable, escalate the matter within the company and consider filing a complaint with your state’s insurance regulatory agency.
- If the claim involves an injury or death, consult a lawyer.
General Advice for Fighting Back
- Know Your Policy: Understand your coverage and what your policy says about the circumstances surrounding your claim.
- Document Everything: Keep detailed records of all communication, medical records, photos, and other relevant information.
- Communicate in Writing: Whenever possible, communicate with the insurance company in writing (email or letter) to create a clear paper trail.
- Don’t Give Recorded Statements: Avoid giving recorded statements without consulting a lawyer.
- Don’t Rush to Settle: Don’t feel pressured to accept the first offer.
- Seek Legal Counsel: If you believe you are being treated unfairly, consult an experienced insurance attorney.
- File a Complaint: If you believe your insurer has acted in bad faith, file a complaint with your state’s insurance department. You can find contact information for your state’s department on the NAIC website.
- Consider an independent review: If your claim is denied, you have the right to appeal. You may also be able to have your case reviewed by a third party. Healthcare.gov provides information on how to appeal an insurance company’s decision.
- It’s important to remember that you have rights as a consumer. Don’t be afraid to assert them and fight for a fair settlement.
A.I. can be a tool to make our life better and advancements are being developed every day. As this article demonstrates it can be used to unfairly take advantage of unsuspecting consumers too. If you suspect an insurance company is taking advantage of you try incorporating the advice above for fighting back. If you feel you are getting nowhere with the insurance company, don’t hesitate to consult with a lawyer. Most injury attorneys will offer a free consultation and will charge you nothing unless your case is successful.
The insurance industry is actively using A.I. to reduce or eliminate payouts and drive up your premium costs. That could be a drop in the bucket compared to what they use A.I. in the future. I’ll explore those possibilities in my next post.
Special thanks to Gerard Siderius for the featured image!
