Posted On: February 22, 2007, 12:15 pm CST

Posted By: Want kind of world do you want

:
I would like to respond to Mike's posting with some thoughts of my own.

The massive regulation of insurance companies by state insurance commissioners does little good when individual companies, with hundreds of attornies and billions of dollars in reserves that they can access for litigation in any state, will take whatever resources and means they can to keep little people with few resources from getting a fair settlement on their claims. Regulation and rate fixing does not prohibit companies from dragging out claims investigations, forcing people into a lengthy mediation processes and, in the end, just wearing them out so that they will take whatever offer is given to them in an effort to put the nightmare behind them.

Unfortunately, the free market system doesn't work as well after a catastophic loss has occurred. It would be nice to be able to change insurance companies after you have decided that the one that is refusing to settle your claim fairly is not dealing in good faith. The problem is that you can't run to another company and get them to pick up the claim where another leaves off. If you buy a car that is a lemon, at least you have some salvage value if you want to change products. Not so with insurance policies. You are stuck with trying to salvage whatever you can out of promises that lay people are generally unable to interpret without the help of an agent who they trusted at the time of purchase. What a surprise when at the time that your life is at its darkest, you find that the coverage that you have paid for for decades, and I mean literally decades, is going to be drug into litigation or mediation so that attornies can now take that "easy to read" policy and split each word and nuance into bits to save as many pennies as are possible.

Wouldn't it be so much easier if they just paid the $50,000 claims that are due, give the people the relief and help that they need and be the kind of blessings to ordinary people that they originally set out to be when the companies were formed. Instead, they use their staffs of hundreds of attornies to spend millions of dollars to avoid paying thousands. I know that this practice is being promoted as "fairly analyzing the losses" but in reality it is nothing more than a stall to get people to accept anything that they are offered so that they can get on with their lives and try to rebuild, even though they may end up in bankruptcy or deep depression.

You mention that AG Hood is forcing SF out of Mississippi. They are leaving on their own, because they do not want to take the chance of using future huge profits from the states that have not had huge loss ratios in to subsidise losses in MS. The law of large numbers ceases to work when you start diluting the exposure that created the megamillions that got you to be the number 1 casualty insurer in the nation. Just ask Mutual of Omaha. Once the greatest name in health insurance is nothing but a shadow of its previous self after withdrawing from the state of New York in an effort to fight legislation that demanded guaranteed issue coverage to all applicants. They too had reached a positon of dominance in their field, only to lose it when they started to limit their payments for profits sake.

Let just start by telling the truth, treating each other fairly and being satisfied with a job well done and stand up for what is right.

Melanie:
I would like to respond to Mike's posting with some thoughts of my own.

The massive regulation of insurance companies by state insurance commissioners does little good when individual companies, with hundreds of attornies and billions of dollars in reserves that they can access for litigation in any state, will take whatever resources and means they can to keep little people with few resources from getting a fair settlement on their claims. Regulation and rate fixing does not prohibit companies from dragging out claims investigations, forcing people into a lengthy mediation processes and, in the end, just wearing them out so that they will take whatever offer is given to them in an effort to put the nightmare behind them.

Unfortunately, the free market system doesn't work as well after a catastophic loss has occurred. It would be nice to be able to change insurance companies after you have decided that the one that is refusing to settle your claim fairly is not dealing in good faith. The problem is that you can't run to another company and get them to pick up the claim where another leaves off. If you buy a car that is a lemon, at least you have some salvage value if you want to change products. Not so with insurance policies. You are stuck with trying to salvage whatever you can out of promises that lay people are generally unable to interpret without the help of an agent who they trusted at the time of purchase. What a surprise when at the time that your life is at its darkest, you find that the coverage that you have paid for for decades, and I mean literally decades, is going to be drug into litigation or mediation so that attornies can now take that "easy to read" policy and split each word and nuance into bits to save as many pennies as are possible.

Wouldn't it be so much easier if they just paid the $50,000 claims that are due, give the people the relief and help that they need and be the kind of blessings to ordinary people that they originally set out to be when the companies were formed. Instead, they use their staffs of hundreds of attornies to spend millions of dollars to avoid paying thousands. I know that this practice is being promoted as "fairly analyzing the losses" but in reality it is nothing more than a stall to get people to accept anything that they are offered so that they can get on with their lives and try to rebuild, even though they may end up in bankruptcy or deep depression.

You mention that AG Hood is forcing SF out of Mississippi. They are leaving on their own, because they do not want to take the chance of using future huge profits from the states that have not had huge loss ratios in to subsidise losses in MS. The law of large numbers ceases to work when you start diluting the exposure that created the megamillions that got you to be the number 1 casualty insurer in the nation. Just ask Mutual of Omaha. Once the greatest name in health insurance is nothing but a shadow of its previous self after withdrawing from the state of New York in an effort to fight legislation that demanded guaranteed issue coverage to all applicants. They too had reached a positon of dominance in their field, only to lose it when they started to limit their payments for profits sake.

Let just start by telling the truth, treating each other fairly and being satisfied with a job well done and stand up for what is right.

Melanie