How Car Insurance Companies Are About to Screw Everybody!

No-one is saying that insurance company bills are the favorite paid bills each month.

After all, you pay all that insurance money on your car and when you get into an accident they still don’t want to pay you for one reason or another. 

You don’t actually get anything in return for all those hard-earned dollars that you expend.  

And while it may not come as a shock to you that insurance companies are trying to screw you, it may be surprising for some that they have put the state politicians on their payroll so they can pass legislation that will ultimately hurt you when a car accident does occur. 

Now, the insurance companies are slick, as are the politicians that are doing their bidding.  They know that if they go ahead and say out loud that these policies, generally called Tort Reform, are good for them, people would balk and vote those politicians out of office, or, worse yet, stop buying insurance. 

But, ultimately, what they are wanting to do is put more money in their shareholders pockets. 

So, what are they doing?  

They say that they are going to increase the length of statutes of limitations because that will be better for consumers – giving them more time to file cases (which how much time do you really need to file a case if you’ve just been injured in a car wreck).  

Or, they are going to drive down insurance costs, because lawyers are filing all these cases just so that the lawyers can take all the money and leave the injured parties with very little.  

Or, they are going to do away with unjust practices allowing victims to collect for the total amount of bills charged by medical providers instead of reducing those bills to the actual amounts paid by the victims’ health insurance (thus lowering the amount the victim gets to collect).  Never mind, that the victim had to pay a health insurance premium to get that contracted rate benefit so why should a car insurance company benefit from that foresight?

All of what they are saying is window dressing to get voters to believe that tort reform is actually good for them and will drive down premiums.    

In what strange world would insurance companies actually spend money on politicians so that insurance companies can make less money on lower premiums? 

And what proof do they have that directly correlates lower insurance premium costs with reducing payouts to victims?  None.  

The reality is that companies will do anything in their power to increase their net profits.  They have a duty to shareholders to do that.  Regulations on the insurance industry can increase or decrease these net profits.  So, if it costs less to pay for a politician’s campaign to get him or her to vote into legislation that would increase the net profits of the company, they would do it not for the benefit of the public, but of the beneficial owners of the insurance company. 

Remember when airlines were hemming and hawing that they couldn’t afford to keep rates low when gas prices were $130/barrel over ten years ago?  Then the government said that airlines could charge a baggage fee for checked luggage.  When the price of oil shot down to less than $50/barrel, did those baggage fees suddenly disappear?

No, they did not and they won’t go away because it is a huge revenue driver for the airline industry.  

Similarly, if the amount an insurance company has to pay out over the course of a year goes down, do you think that the insurance company is suddenly going to lower its rates to get more customers in a classic race to the bottom?  

It is very unlikely.  It is not as if airlines suddenly decided to drop their baggage fees to compete with other airlines in order to get more customers.  They just pocketed the extra benefit to their net profits and that’s exactly what is going to happen in states like Louisiana undergoing tort reform. 

So, yet again, the insurance company behemoths prevail!