COLUMN: Insurance rates are too high: It's not from lawsuits
For at least six years, hundreds of
That legal protection, the ability of a homeowner to sue for bad faith and force an insurer to open its books, is precisely what insurers have tried to restrict through legislation. Last year lawmakers considered Senate Bill 726, a bill to restrict property-insurance lawsuits, until Rep.
I have seen this playbook before, because I've spent my career studying it. In the mid-1970s, as Federal Insurance Administrator, I watched doctors march on
Our study proved the cause was not lawsuits but the insurer's own economic cycle. Ford wisely killed the bill, though several states were duped and took away legal rights from their citizens anyway.
If lawsuits from bad lawyers really caused the crisis, why not push a bill to get bad lawyers disbarred, instead? The real reason insurers sought that legislation was not to lower rates (their profit is higher with higher rates) but to make it easier to deny or delay claims with a lower chance of getting caught.
That same data proved vital when insurers tried the same lies again in the 1980s and early 2000s. I testified in nearly every state and in
Which brings us back to
The big lie is always the same: give up some of your legal rights, and your rates will go down. I have studied this question for decades with Americans for Insurance Reform, and we have never once seen rates drop because people lost legal rights.
Insurers now point to the alleged "miracle" of
Give up your legal rights to insurance companies, and your rates do not go down, but your chances of ever getting a claim paid go down with them.
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