"The Insurance Hoax" by David Dietz and Darrell Preston, Bloomberg Markets, September 2007.

• Position: THE Monthly JOURNALISM AWARD - Brief article

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Over the past decade, the property insurance industry has blazed toward record profits. Bloomberg Markets' David Dietz and Darrell Preston decided to see how the industry's customers are faring. From the charred mesas of Southern California to tornado-ravaged Tennessee to reeling New Orleans, they found frustrated policy holders living in debt and scratching their heads at payouts that were often less than half of what they were owed. And behind the scenes, they found the consulting firm McKinsey, which developed an immensely lucrative system that insurers have used to exploit vulnerable customers.

From hundreds of cases and complaints, Dietz and Preston assembled a convincing record of the industry's tactics. McKinsey prepared PowerPoint slides for Allstate, advising the insurer to quickly offer claimants a low settlement. Most people will take it, unaware that they deserve more. If they protest, another slide advised Allstate to "Sit and Wait," recommending that companies delay payment to wear down the...