"Where's the Risk"
by Marsha Kazarosian

         Maybe the tables are finally turning on the insurance companies. Maybe, because of the insurance companies’ seemingly heartless responses to the Katrina Hurricane victims, people will finally understand. Perhaps the recent "outings" of their outrageous behavior will educate the public as to the reason why the biggest skyscrapers, malls, conglomerates, and even medical institutions, are owned or heavily financed with the money that the insurance companies have kept as a result of denying claims.    

  Insurance companies charge premiums to cover risks. The riskier the insurable event, the higher the premium. Because of course, these insurance companies are always there for you, and certainly have to pay out a great deal of money for the many, many people that have been saved by these companies, in the face of disasters. If you don’t believe me, just watch TV. It is all there in living color.

     Either the insurance companies have some incredible luck, or they have a system. The question recently been raised by a slew of investigative reporters such as Anderson Cooper, is whether or not that system is the systematic denial or deadly delay of legitimate claims

      Denying claims, understandably, would be a very effective way for insurance companies to manage their "risks" to zero. Imagine the billions of dollars that such a system would be freed up to buy skyscrapers, conglomerates, malls, medical institutions, etc.

Wait a minute…..

     In Massachusetts, you can’t drive a car if you don’t have insurance. A reasonable requirement, on the face of it. Let the insurance companies bear the risk. That is what we pay them for. But what most consumers do not realize is that the insurer’s risk was significantly reduced when no-fault was introduced in the early 70’s.

      No fault is a perfect example of a propagandized anti-consumer system that benefited the insurance companies and reduced the consumers’ ability to recover for or even request coverage for damage or injury.

     And how ingenious was that name. "NO FAULT". Conjures up all sorts of family value type feelings. That must mean that no matter whose fault it is, the insured will be able to recover for the damage that he or she suffered. Beautiful.

      Well, that isn’t quite the case, as many, many consumers are now beginning to realize. It really should have been called "NO RISK". And in actuality, for the consumer, the subtitle to "NO FAULT" could have more aptly been called "NO CHANCE". Because, as Mr. Cooper and other investigative journalists are now uncovering, insurance companies are unlikely to give policy holders a shot at fair coverage, fault or "NO FAULT".

     In fact, it appears more a case of the big guy taking advantage of the little guy. And what a great way to reduce risk. Slick-talk the person who is unlikely to read the small print, the person who is unlikely to ask for an explanation, the person who takes the policy on its face value,( if you will excuse the expression), the person who truly believes that when they are told that they will be covered and not to worry, they believe it. If it says no fault, and it is cheaper than what they have been paying, then where is the down side?

      But ask anyone to explain their auto policies, and I challenge you to find someone who truly understands the coverages and the exclusions. Aye. There’s the rub. The exclusions. And, naturally, the exclusions minimized the risk.

Let’s go back to Katrina for a moment.

     Consider State Farm. The "Good Neighbor". Here is what a good neighbor State Farm is. When Katrina devastated Louisiana and Missouri, State Farm was there, alright. They were there to tell the stricken homeowners that the Hurricane and Flood insurances for which they had been paying premiums year after year, excluded water damage. Excluded water damage? It is Hurricane insurance. It is Flood insurance. How in the world does it exclude water damage that is caused by high winds surging water up to a level that destroys homes in its wake?

     The devil was in the small print, it appears. They insureds saw the important words, "Hurricane " and "Flood " and "Insurance", and they felt pretty safe. Why wouldn’t they? They were in the hands of a good neighbor. If you don’t believe me, just turn on the TV.

     And not only did State Farm stand by their exclusions and deny coverage for water damage, but last year, ABC News broadcast two of State Farm’s long-time employees admitting that State Farm consistently pressured and manipulated investigating engineers to report that the damage was done by water, (an excluded event), and not by wind, (a covered event). Damn good risk management!

     Senior State Farm insurance coordinators were heard saying, "Tell them that if they don’t change their report, we aren’t paying their invoice." So not only did they rely upon their "legal" right to deny coverage to these devastated premium payers, the insurance company guaranteed their legal rights by phonying up documents, like an insurance policy, to manage their own risk. What are neighbors for, anyway…..

     And it has only gotten worse. Allstate has been recently spotlighted by CNN’s Cooper for engaging in delay and denial tactics with automobile cases; tactics well known to many a frustrated attorney seeking assistance for an injured client. CNN’s experts report that policy holders walk away from billions of dollars in damages because they simply can’t afford the impossible delays, denials of coverage, and the insurance companies’ out-wait, out-gun, and outspend tactics. And it’s working. For the insurance companies, that is.

     So where do all of those billions go? Back to the insurance companies. Back to the skyscrapers, the shopping malls, the medical conglomerates, all of the places that we go to give even more money back to the insurance companies.

      State Farm is finally agreeing to work out a settlement for the damage done by all of their evil ways. Why? Not because it cares about the consumer. Not because it saw the devastation and it brought tears to their corporate eyes. No. It was because courageous trial lawyers such as Richard Scruggs from Mississippi agreed to take on these conglomerates and make them accountable to the little people. To the people who had been paying the premiums. Because that is what trial lawyers do.

     So don’t let the cute jingles fool you. Nationwide is not on your side. Well, they aren’t, that is, if you are a Katrina victim. They, too, denied claims in a fashion similar to Allstate’s debauchery.

     The insurance company surplus in 2005 was about $427 billion. $427 billion built by your insurance premiums, and contributed to by denials of pay-outs. Who wouldn’t cover risks if all it took to make $427 billion dollars was to collect premiums, deny claims, and invest the reaped dough?

     In response to the great propaganda machine of the Tort Reformists, trial lawyers have called for the reform of the insurance industry. And every day, with each disclosure that is published, and each misrepresentation that is uncovered, more and more people come to the same realization. It is becoming more and more apparent that they only reform needed today is Insurance Reform.

     So the next time you hear a cute jingle, or a calm, soothing voice tell you that you are in good hands, or a promise that insurance companies are "on your side", or a comment suggesting that a rise in insurance premiums is due to trial lawyers, or fraud, or large verdicts, run! Run screaming into the night! If you don’t, rest assured that the skyscrapers will get taller, the malls will get bigger, and insurance company investments will balloon into the trillions. Because insuring risks is apparently a pretty darn good money maker, despite the odds.

     And in the meantime, people in Louisiana and Missouri will still have no homes, people injured in accidents will have to cover their own losses, and the elderly won’t be able to afford health insurance. And that is nobody’s fault but the insurers’.









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