It is a fact that though we allocate huge amounts of our earnings to insurance, to secure our persons and properties, we often rack up benefits less than what we need and deserve. Do you remember having heard of a truly satisfactory and not just barely acceptable true story about insurance claims? Barely. Nothing’s unusual about an insured paying lump sums of money because his insurer fails to compensate him of fair and reasonable premiums.
We have to remember that insurance companies make money by the absence, or not paying, of claims. According to the article entitled Taking Aim at Insurance Company Gouging the insurance industry has aggregated large amounts of money profit by evading payment of legitimate personal injury claims. It is estimated that around $60 billion of after-tax profit has boomed from the $48.8 billion record of 2005, which previously broke the $40.5 billion record of 2004.
Voila! The percentage of premiums paid out for claims dropped from around 75% in 1980’s to an astounding 60%. Now who’s surprised?
The maddening part though is not exactly that – the government has enacted the Terrorism Risk Insurance Act that subsidized the insurance industry to around $7 billion! The Congress should definitely abolish the act and push its expiration this year.
It is utterly revolting to put the blame on trial lawyers and clients as the source of increasing premiums. The insurance industry’s power remains unchecked, should be thoroughly reviewed and addressed through fair regulation to minimize room for insurance payment evasion. The middle class is the biggest victim in this greed as it continues to burden rising premiums.