Ghosted by Your Insurer? The Truth Behind Instant Claim Rejections

Ghosted by Your Insurer? The Truth Behind Instant Claim Rejections.

Article written by: JJ Palmer, Consumer Law Specialist: Lawyer Monthly – Updated April 2025

More than a year ago, UnitedHealthcare Group Inc.’s CEO, Brian Thompson, faced intense backlash after it emerged that the company had implemented an artificial intelligence (AI) system designed to automatically reject medical claims from elderly and seriously ill patients. This controversial AI practice triggered a wave of criticism, leading to death threats against Thompson, as well as a high-profile class-action lawsuit, and deepening concerns about ethical practices surrounding AI technology in the healthcare sector.

The use of AI by UnitedHealthcare and other major insurance providers to systematically deny health insurance claims has ignited a heated debate. The situation escalated further following the shocking murder of Thompson, placing even greater scrutiny on how automated systems impact vulnerable patients.

Healthcare experts describe this growing tension as an “AI arms race,” resulting in what some term a “slow-motion HAL” effect—an unsettling reference to the malevolent AI in Stanley Kubrick’s film “2001: A Space Odyssey,” which coldly and systematically disables astronauts’ life-support systems.

“We are right on the cusp of a lightning rod issue with the intersection of AI and health care transformation,” Sherri Douville, CEO of Medigram, said in an interview. “When you introduce tech, there is a lot of despair and frustration with the issue of (higher rates of) denials” because of AI, she added.

Indeed, Thompson had reportedly received threats related directly to the denial of medical coverage to patients, according to his wife, as cited in a Wall Street Journal report. Thompson was shot to death in New York City on December 4, 2024 by suspect Luigi Mangione and is awaiting trial for the murder of Thompson.

These troubling developments have underscored the urgent need for transparency, accountability, and human oversight in AI applications within healthcare.

This harsh reality is called “digital ghosting,” and it’s rapidly becoming an unsettling norm in the travel insurance world. If you’ve experienced it first hand, you’re certainly not alone—and, more importantly, you don’t have to accept it.

Understanding Digital Ghosting in Travel Insurance

What is digital ghosting? Digital ghosting occurs when insurance providers depend heavily on automated systems—often powered by algorithms or artificial intelligence (AI)—to evaluate insurance claims. Essentially, your submitted documents are processed instantly by software that swiftly decides whether your claim is approved or rejected. This includes travel claims, healthcare claims, auto claims and other insurance claims.

While automation might sound efficient and cost-effective, especially from the insurer’s perspective, these systems are alarmingly prone to errors. They frequently lean towards denial, particularly during peak travel seasons like Easter, Christmas, or summer vacations, when the volume of claims significantly increases.

How AI is Changing the Travel Insurance Landscape

On the surface, automation seems like an ideal solution for managing high volumes of claims. Insurance companies can significantly cut down on staffing costs, expedite processes, and swiftly manage peak-season workloads. However, this efficiency comes at a significant human cost. Travelers experiencing genuine issues are often left frustrated, confused, and helpless against an automated system designed primarily for quick resolution—usually a rejection.

Professor Frank Pasquale from Brooklyn Law School highlights the inherent dangers of such systems:

“Algorithms are effectively making critical life decisions without adequate human oversight or accountability. Without clear transparency, these automated decisions become unfair, unaccountable, and even harmful.”

Indeed, the UK’s Financial Conduct Authority (FCA) has reported a troubling rise in consumer complaints specifically tied to automated claim denials.

Why Automated Systems Frequently Get it Wrong

Automated systems excel at handling clear-cut, straightforward scenarios. However, travel-related issues rarely fall neatly into defined categories. Real-world situations are complex, nuanced, and often unpredictable. Algorithms typically fail to grasp:

Complex travel arrangements involving multiple bookings and providers.
Exceptional circumstances such as severe weather, sudden illnesses, or family emergencies.
Unique personal contexts, where human judgment is essential.

As a result, legitimate claims are routinely denied due to an algorithmic misunderstanding or misinterpretation of the presented evidence.

Legal Implications: When Automation Crosses the Line

Beyond the obvious frustrations, there are significant legal implications tied to automated denials. UK laws clearly mandate that insurance claims must be handled with fairness, transparency, and reasonable care. Relying solely on automated systems, especially without proper human oversight or appeal mechanisms, can breach these legal obligations.

Professor Sandra Wachter from Oxford University emphasizes:

“UK GDPR explicitly provides consumers the legal right to demand human intervention whenever automated decisions significantly impact their claims.”

In the US, according to the National Association of Insurance Commissioners (NAIC), insurers using artificial intelligence in claims processing must comply fully with existing insurance laws and regulations. The NAIC has emphasized that insurers should establish clear governance and risk management procedures to ensure AI-driven decisions remain fair, accurate, and transparent for consumers.

Answers to Common Questions About Automated Claim Denials

Why was my travel insurance claim instantly rejected?
Typically, automated systems handle these rejections quickly—but they often make mistakes, especially during busy travel periods.

Can I request a human to review my rejected claim?
Yes. Under the UK GDPR regulations, you have a clear right to ask for a human review of any automated decision.

Can I request a human to review my rejected claim in the USA?

Yes, you can request a human review of a rejected claim, especially for health insurance claims governed by ERISA (for employer-sponsored plans) or under state law for other types of insurance. Insurers are generally required to offer an appeals process that includes human review.

Do I have the right to appeal a rejected claim?

Yes, under U.S. law, you have the right to appeal a rejected claim. You can usually submit additional documentation and have a human reviewer evaluate your case. For health insurance claims, this process is specifically protected under laws like ERISA and ACA.

What steps can I take if my insurer continues to ignore me?
File an official complaint with the Financial Ombudsman Service or seek legal advice. Insurers are legally required to respond.

Steps You Can Take Right Now

Clearly request human oversight of your rejected claim.
Lodge a formal complaint through the Financial Ombudsman Service.
Publicly share your experience; insurers often react faster when facing public scrutiny.
Seek professional legal guidance if necessary.

It’s Time to Demand Better

Travel and Health insurance exists to provide peace of mind, protection, and support during unforeseen disruptions—not to create additional stress or frustration through automated denials. If your insurer has digitally ghosted you, remember that you have rights, and those rights must be respected.

Don’t accept a swift, unjustified rejection. Push back. Demand transparency and fairness. Your peace of mind should never be subject to automation.

If you’ve faced digital ghosting from your insurer, you don’t have to fight alone. Contact Lawyer Monthly today, and let us help you reclaim the coverage you deserve.

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