Originally Posted by hellosailor
...Then they also know that if they deny a certain number of claims, a substantial number of people will accept that and not argue--even if the denial is wrong.
I think I've encountered that in other areas, not just insurance. I strongly suspect that in many areas of business, the default answer is often "no," in hopes that a certain percentage of people won't take it any further than that. And they probably know what the percentage is, and that probably figures into their financial planning.
[Totally off topic, but that reminds me of my dad telling me about having dinner with an executive from a phone company. My dad asked him what percentage of pre-paid phone cards were never used, thereby giving the phone company a huge profit margin on those cards, and the phone guy wouldn't even acknowledge that my dad had asked the question. Again, I strongly suspect that the phone company knows precisely what percentage of phone cards will never be used.]