Rules vs. Image

Back in Elementary School, most of us learned the old saw about not judging a book by its cover, and before the end of Middle School, most of us had suffered at least one embarrassing lesson on the subject. But for some reason this doesn’t keep people from assuming that all lawyers are dishonest, all doctors are arrogant pricks who like playing god, all politicians are amoral mercenaries without a moral conviction anywhere in their soul, all police officers like to “put the boot in” once in a while, or that all bloggers talk too much…

All right; I’ll give you that last one. But this syndrome probably does account for the outrage coming out of Knoxville, TN over a disallowed insurance payout because of a pre-existing condition. Everyone who hears the story is just assuming that the insurance company is just screwing the policy holder out of money by invoking a little-known, seldom-used clause somewhere in the fine print. Which they are, of course; what makes this case special is that the policy in question is a life insurance policy…

There’s a story being reported ABC News Online about a man who died after being gunned down by “unknown assailants” under circumstances the police consider indicative of illegal activity. The insurance company is claiming that since they require disclosure of a customer’s medical condition before they will write a policy, and the dead man failed to disclose that he had hepatitis C, he was in breach of their contact and the policy is void. The widow is suing, claiming that neither the deceased nor she knew about his illness, and the company is just trying to screw them out of the money by invoking the “pre-existing condition” claim…

What makes this story remarkable is that we’re hearing about it at all. Normally, this would be an extremely dull civil case, in which the insurance company attempts to produce evidence that the policy holder did, in fact, know he had hepatitis C before signing the paperwork swearing that he didn’t, and is thus committing fraud (and perjury) by doing so. The policy holder’s estate would attempt to prove that he didn’t know any such thing, although this is difficult (since you can’t prove a negative) and they’d probably have to settle (or drop the matter) if the insurance company could prove its case. Particularly if Tennessee turns out to be one of the states in which you are responsible for whatever you contact to do (or not do), regardless of whether you understand the contract…

In this case, however, we have all of the makings of a sensational news story: a poor widow, a man being shot in the back, and an evil large company refusing to pay off on a life insurance claim because of hepatitis C when that’s clearly not what killed the victim. Never mind that the man had “a lengthy criminal record that included drug trafficking, burglary, vandalism and public drunkenness” according to public records. Never mind that the policy was still in its conditional phase, and the company was perfectly within its rights to cancel if they had reason to believe that the policy holder was lying to them. Never mind that the contract between the man and the company required him to certify not that he believed himself to be healthy, but that (under penalty of perjury as well as the cancellation of the policy) he actually WAS healthy…

The facts of the case are that the insurance company would have cancelled the policy the moment they found out about the hepatitis C, that the policy holder wouldn’t have had a leg to stand on after making claims about his health that were not true, and no one would have bothered reporting on it – if it happened any time before the AIG scandal and all of the other events that have made the insurance industry into one of the most hated sectors in American commerce…