Insurance Companies Create Crisis to Raise Premiums
The Americans for Insurance Reform study says that insurance companies often manufacture periods of crises in order to drive up premiums and profits. The authors of the study call these short-term periods “hard markets,” where premiums sky rocket and coverage becomes unaffordable.
To further boost profits, the industry then uses these false crises to support their calls for so-call “tort reform” to make it more difficult for ordinary citizens sue and to limit the amount of a recovery an injured party is allowed to recover. The report, Repeat Offenders: How the Insurance Industry Manufactures Crises and Harms America, says that increasing premium rates following hurricane Irene is a prime example. Although the hurricane did little damage, homeowners and business owners are seeing their premiums skyrocket.
Tennessee has seen insurance carriers and big business cry wolf in the past several years. Beginning in 2008 the law changed making it more difficult to sue a doctor for medical malpractice in Tennessee. The law requires an injured patient to give advanced notice of the potential claim and to pay for an expert witness to review the case before filing. The result of the change in law is that lawsuits against doctors and hospitals dropped 44% by 2011 and doctors’ insurance premiums fell as well. One could argue that these “reforms” had the desired effect of decreasing frivolous lawsuits. After all, a doctor should not be sued unless an independent expert certifies that the doctor committed medical malpractice. However, the “reforms” did not stop here.
In 2011, despite the reduced number of lawsuits being filed and despite the decreasing premiums, the insurance industry and big business pushed through additional “reforms.” The new law places an arbitrary limit to the amount of money a person can recover in all Tennessee personal injury and wrongful death cases, not just medical malpractice cases. It also makes it more difficult to sue insurance companies for unfair and deceptive practices. These recent changes in the law do absolutely nothing to reduce frivolous lawsuits or create jobs. Instead, the changes are designed to increase profits for corporations and insurance companies. The law encourages trucking companies, hospitals, and nursing homes to act negligently and recklessly. More importantly, the law prevents the most seriously injured citizens from obtaining a full and fair recovery.
Since graduating magna cum laude in 2005 from the University of Memphis School of Law, Thomas has helped make a difference in the lives of victims of serious personal injury, wrongful death, and professional negligence. Thomas has extensive trial experience in both state and federal court. Among other victories in the courtroom, Thomas obtained several impressive jury verdicts and settlements
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