The Human Toll of Denials: A Topic Not Often Considered
by Ken Miller, AASP/NJ President
Every single day, claims personnel at auto insurance companies make decisions that deeply affect the lives of policyholders.
Yet, many of these decisions are made in strict adherence to corporate directives – guidelines designed to prioritize cost-cutting over compassion, often in direct contradiction to the promises made in the policy. Adjusters, often pressured to minimize payouts, rarely pause to consider the personal consequences of their denials: families left without transportation, individuals struggling to recover from financial hardships or repairers forced to compromise on safety. This detached, procedural approach to claims handling has eroded trust in the insurance system and left countless policyholders feeling abandoned in their time of need.
This dynamic was disturbingly underscored late last year when the CEO of UnitedHealth Group was murdered in New York City. Even more unsettling has been the public reaction. Some individuals, disillusioned by their own experiences with denied claims, have shockingly celebrated the suspect as a hero or symbol of resistance against insurers. This grotesque distortion of justice reflects how broken the insurance system has become. When the public begins to see violent acts as a form of justice, it reveals the profound failure of an industry that is meant to protect, not betray, its customers.
High salvage values have driven insurers to lower the thresholds at which vehicles are considered a total loss, allowing them to recoup costs through salvage auctions while issuing lower payouts to policyholders. At the same time, repair costs are routinely undervalued, often leaving repairers and insureds scrambling to make up the shortfall. This results in policyholders receiving inadequate settlements that fail to restore their vehicles to pre-accident condition, further eroding trust in the process. Those still paying off loans may find themselves underwater, saddled with debt for a car they can’t replace or repair. It’s a cruel calculus, designed to prioritize the insurer’s bottom line while disregarding the devastating financial impact on policyholders.
Repairers are no less affected by these tactics. Total loss declarations bypass shops entirely, reducing work opportunities for those committed to safe, proper repairs. When repairers are involved, they often face relentless pressure to use substandard parts, cut corners or accept rates that don’t reflect the true cost of repair. Insurers have weaponized these practices to pit repairers and insureds against each other, deflecting attention from the root cause of the problem: an industry driven by profit at any cost.
The tragic murder of the UnitedHealth CEO is a grotesque reflection of how deeply broken the insurance system has become. It highlights the personal toll of decisions made by claims personnel and the systemic prioritization of profits over people. Policyholders deserve more than being treated as obstacles to insurers’ financial goals. They deserve fair, timely settlements that honor the promises made to them.
Reforming this broken system requires more than regulatory oversight; it requires a cultural shift within the industry. Adjusters and claims personnel must be empowered to consider the human consequences of their decisions. State regulators must impose stricter oversight, and insurers must be held accountable for practices that harm their policyholders. Without these changes, the frustration and despair felt by so many will only grow. And while this recent tragedy has served as a wake-up call, we must act quickly to ensure no similar circumstances arise – or worse, that another copycat crime is carried out in a misguided response to the industry’s failures.
Want more? Check out the February 2025 issue of New Jersey Automotive!