There are many misconceptions about insurance and your rights as a Texan. Many believe that limiting the rights of injured individuals will make insurance cheaper, but the truth is more complex. Let's break down the key points so every Texan can understand why this issue is important.
It's commonly believed that limiting the rights of injured people will make insurance cheaper. However, studies show this is false. Suing insurance companies does not cause rates to go up. Even when states restrict lawsuits, insurance premiums don't decrease. States with few lawsuit limits have similar insurance rates to those with strict limits. The real issues causing insurance problems are unrelated to lawsuits. For instance, capping lawsuit damages doesn't lower premiums; surprisingly, it can increase them. Often, insurance companies make higher profits when there are limits on lawsuit damages. Experts and industry insiders acknowledge that tort reform doesn't reduce insurance costs ¹.
For the average Texan, it's essential to know that attempts to fix insurance issues by taking away the rights of injured people don't make insurance any cheaper. Despite what some may think, the act of suing insurance companies isn't the reason why insurance rates go up. Years of studies from groups like Americans for Insurance Reform and the Consumer Federation of America have shown that even when states limit the ability to sue (known as tort law limits), it doesn't result in lower insurance premiums ². In other words, states that don't restrict lawsuits have insurance rates similar to those that do.
Imagine you get into a car accident or your Texas home is damaged by a storm. You pay for insurance to cover these losses, but what if your insurance company refuses to pay what it owes you? If lawmakers take away your right to sue the insurance company, you have no way to fight back and get the money you need to repair your home or cover medical bills. This is why understanding these issues is crucial for every Texan.
The true causes of insurance problems lie elsewhere, not in lawsuit costs. When states cap or limit the amount of money someone can win in a lawsuit, it doesn't reduce the cost of insurance. In reality, these caps can lead to an increase in premiums. This counterintuitive situation is because these caps allow insurance companies to keep more money, leading to higher profits rather than savings for policyholders ³.
Kenneth Klein, an expert who spoke to a national group of insurance regulators, highlighted that litigation does not significantly affect rising insurance premiums. This means that lawsuits aren't a significant factor in why your insurance costs might go up ⁴.
Even insiders from the insurance industry, like the American Insurance Association, have openly stated that tort reform – changes intended to limit the ability to sue – does not promise to lower insurance rates. This acknowledgment is crucial because it clarifies that limiting lawsuits isn't a solution to high insurance costs ⁵.
Often, people find themselves in court against insurance companies because their legitimate claims are not being paid. In Florida, for example, many policyholders hire lawyers because insurance companies mishandled or denied their claims. A survey found that 78% of people who hired lawyers did so due to poor treatment from their insurers, such as delayed payments or inadequate settlements ⁶. Insurance companies tend to hide crucial data that could challenge their claims about the cost of lawsuits. Unfortunately, lawmakers don't always request this data before passing laws restricting victims' rights. For fairness, lawmakers should require complete transparency from insurance companies, including detailed studies of all claims, industry trends, and financial reserves. This transparency would ensure that any changes to the law are based on accurate and comprehensive information, protecting the rights of all citizens ⁷.
By understanding these points, Texans can better grasp the complex relationship between lawsuits, insurance premiums, and the laws that govern them. This knowledge empowers citizens to advocate for fair treatment and transparency from insurance companies and lawmakers. Texans should stay informed and involved in local and state politics. If lawmakers propose changes that might take away your rights to sue insurance companies, speak up and ask questions.
Demand transparency from insurance companies and ensure legislative changes are based on comprehensive and accurate data. This can help protect your rights and ensure fair treatment for all Texans. Public officials must obtain and publicly review comprehensive insurance data before making such legislative decisions. Lawmakers should require detailed studies of closed claims, industry trends, reserve levels, and recent rate filings from insurers.
By staying informed and advocating for your rights, you can help ensure that the insurance industry remains fair and transparent. This not only protects you but also helps all Texans get the fair treatment they deserve. It's up to every Texan to be vigilant, ask tough questions, and hold both insurance companies and lawmakers accountable. When you understand the real issues at play, you can make better decisions and stand up for your rights, ensuring a fair and just system for everyone in our great state.
If you or a loved one has been personally affected by the actions of an insurance company after a personal injury-related incident, call 972-945-1173 or visit www.McCrawLawGroup.com to get in contact with one of our attorneys today.
If you are in need of a personal injury attorney in North Texas, please contact the team at McCraw Law Group today. We are ready to help you in a broad range of serious accident and injury legal issues, and offer multiple ways to reach us.
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If you are in need of a personal injury attorney in North Texas, please contact the team at McCraw Law Group today. We are ready to help you in a broad range of serious accident and injury legal issues, and offer multiple ways to reach us.