Insurance companies rule the world. If you go to any big city, most of the big buildings are owned by insurance companies and banks. There is a reason for that. Insurance companies know how to make money.

They take as much as they can from premium payments and pay out as little as they have to when individuals are harmed. In other words, you're in good hands when you are paying your money but not when you need compensation from the insurance company.

Insurance companies harm their insureds in three ways. The  most prevalent harm occurs when an individual has an accident causing physical injury to a third party. All insurance policies have liability limitations- the maximum amount the insurance company will pay for harm caused by the insured. Often times the third party is willing to accept compensation within those limitations for his or her injuries, even though the value of the injuries is substantially greater than the limitations. The insurance company chooses to not settle for that figure because they believe they will not have to pay more than their limitations of liability no matter how large a verdict, and they gamble on a 5 to 10% chance that a jury will award no damages.

This works will for the insurance companies but leaves many individual insureds facing financial ruin when verdicts in excess of policy limitations result. For example, in a recent case, one individual caused an accident which resulted in medical bills to the injured party in the amount of $21,000. The insurance policy had a loss limitation of $15,000. The attorney representing the injured party offered to settle for $15,000. The insurance company refused to settle, even though there was almost certain liability. Instead the insurance company chose to gamble and went to trial. They believed the insured would have to pay the amount of any verdict in excess of $15,000, and they hoped the jury might award nothing. The insurance company's logic was, "If the most we'll have to pay is $15,000, we may as well take a chance; we might have to pay nothing." The jury returned a verdict of $50,000. The individual was facing $35,000 in personal loss, even though the insurance company could have protected him from such loss by settling for $15,000.

That individual has the right to sue his insurance company for the $35,000 he lost, plus the damages to his reputation, credit rating and the stress caused by such bad faith refusal to settle. Insurance companies additionally often refuse to settle building and property losses which occur as a result of fire. They allege "arson," try to damage the reputation of the insured in an attempt to avoid their legal obligations to pay for such loss. Individuals who face such bad faith refusals to pay of property damage have legal rights of recovery.

Many HMO's and insurance companies refuse to pay the cost of necessary and effective medical treatment for health conditions insured under the terms of the insurance policy, especially when such treatment is expensive. Some insurance companies have a policy of categorically denying payments for certain treatments even when medically appropriate. Because insurance companies will not pay for appropriate treatment the insured does not receive appropriate treatment and deteriorates or dies. The patient, his estate, and possibly his relatives have a cause of action for such bad faith refusal to authorized medically necessary treatments.