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The insurance industry’s drive for profit has overwhelmed its obligation to policyholders, and insurance companies abide only by the first commandment of insurance–Thou shalt pay as little and as late as possible.

Tension between insurers and their customers has long existed, but it was the 1990s that saw insurance companies looking for ways to systematically streamline the process to increase profits. In 1992 Allstate sought advice from consulting firm McKinsey & Co, to help increase profits. The firm compiled 13,000 pages of documents which amounted to advice on how Allstate could increase profits by paying out less in claims, according to the court record relating to a Fayette County, Kentucky car wreck. Allstate’s profits increased 140% from 1996 to 2006. State Farm, who has routinely undercut Katrina claims amounting to bad faith, also hired McKinsey & Co.

In the wake of Hurricane Katrina, insurers reported their highest ever profit, $73 billion, up 49 percent from the previous year. With 60 million customers paying more than $50 billiion in premiums per year, homeowners are often surprised to find out that insurers won’t pay the full cost of rebuilding their damaged or destroyed home.

The insurance companies routinely refuse to pay market prices for homes and replacement contents, they use computer programs to cut payouts, they change policy coverage with no clear explanation, they ignore or alter engineering reports, and they sometimes ask their adjusters to lie to customers, according to court records and former employees.

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