The Business of Denial
March 2026
The filing of an insurance claim should be a straightforward process. However, many times that process is not that simple. A person who files a claim will receive a letter of denial. The denial of coverage will make it seem like a matter that is trivial or a technicality. Then the difficult process begins of fighting for your rights.
Many people believe that insurance companies make money by simply collecting premiums and paying out cliams. However, the reality is far more complex. Insurance companies rely on two distinct revenue streams: underwriting and investments.
Underwrting is the process of evaluating risks and setting premiums. Insurance companies are at their core massive investment firms. Premiums that are paid are put into investments. Insurance companies combine all of the premiums and invest in stocks, bonds and other financial instruments. The goal of the insurance company is to keep hold of the premiums for as long as they can. The longer they hold to the premiums, the longer they can keep the money invested. This is why insurance companies are in the business of denial. The insurance company may know what the ultimate outcome may be of a claim but will seek to deny claims to keep hold of premiums.
At Herrick & Hart, we have been dealing with insurance companies since 1951. You need a personal injury attorney, who understands the insurance business to help you with your personal injury claim. That is why it is important to never go it alone and seek experiened personal injury representation.