It’s no secret that insurance companies are in business to make money, but the lengths some insurance companies go to in order to increase profits is alarming. In fact, dozens of posts on this blog have alerted our readers to the improper actions some insurance companies may take to put profit above their policyholders’ interests.

In a recent article, Insurance Claim Delays Deliver Massive Profits To Industry By Shorting Customers, readers are alerted to some of ways carriers are benefiting and insureds are suffering. Anita Taff, a Georgia based public insurance adjuster, was interviewed regarding the treatment her elderly client received from Allstate Insurance Company in connection with a fire loss from 2010.

Here is the story of Madeline Burdett’s fire loss:

Madeleine Burdette, a retiree, is an Allstate customer. . . .When her Georgia home burned in November 2010, Burdette was in Ohio, where she lives most of the year. She said the fire marshal in Georgia told her that her house would have to be torn down. "The entire middle of the house was gone," Burdette said. "It took out everything. Just the outside walls were left untouched."

The next day, she said, Burdette’s Allstate adjuster told her the house could be repaired. Allstate also said it would have to do a thorough investigation to determine if the fire was caused by arson. If it was arson, the adjuster told Burdette, Allstate would not pay for any damages. According to former employees, such investigations are a common practice at Allstate and are encouraged by supervisors as a way to avoid paying claims quickly.

* * *

"I believe [delaying claims] is an effort to put the squeeze on policyholders," Taff told HuffPost. She explained that while a claim is being held up, the insurance company may stop paying the policyholder’s additional living expenses, forcing the policyholder to cover mortgage and rent entirely out of pocket. "That’s something that many people cannot afford to do, so they’re forced to take a lower settlement," Taff said.

Allstate’s response to Burdett’s decision to hire a public insurance adjuster is not uncommon but it is improper.

She received a phone call within 10 minutes from her Allstate adjuster asking her not to hire Taff or any other public adjuster. "He said, ‘If you hire a public adjuster, I’m going to deny and delay this claim for as long as possible,’" Burdette told HuffPost. Taken aback, she then asked if it wasn’t in his best interest to settle the claim. "Not really," he replied, according to Burdette.

Burdette did hire Taff and continued to pursue her claim. Allstate’s claim tactics were designed to encourage Burdette to give up or give in, but Burdette held on and is still fighting to be properly paid for this claim.

As former Allstate agent Shannon Kmatz told the American Association for Justice, the trial lawyers’ lobby, the strategy was to make claims “so expensive and so time-consuming that lawyers would start refusing to help clients.”

* * *

Those who took the low-ball offers received prompt service, while those who didn’t had their claims delayed and potentially were reduced to bringing expensive lawsuits to fight for their benefits.

* * *

The strategy was dubbed ‘Good Hands or Boxing Gloves’ by the consultants, riffing on Allstate’s advertising slogan.

To understand more about Allstate’s actions, check out David Berardinelli’s book, From Good Hands to Boxing Gloves – The Dark Side of Insurance and Delay, Deny, Defend by Reuter’s professor, Jay Fienman.