Wednesday, October 24, 2007

Local Politics: Nonsurance

So, here's the story: Washington State is one of only 6 states without punitive damage laws. Our lawmakers, in one of those acts they should be commended for, put into place a law that makes insurance companies more responsible for denying legitimate claims, with the punishment being increased damages. The idea is, with a bit more of a threat behind it, the insurance companies will think twice (or do more homework) before denying a claim.

The insurance industry, having failed to strangle this bit of consumer protection in its crib, ponied up a bunch of cash and gets the law as a referendum on the ballot. Then it drops about $10 Mill (so far) for a lot of really bad commercials trying to convince the voting public that this is REALLY about greedy lawyers. And should this law go on the books, then the insurance companies will just raise their rates. So there.

So I guess my first question is, if Washington State is one of the few states that DOESN'T have punitive damage laws, and those laws are a cause of higher rates, then Washington State should have among the LOWEST insurance rates in the country, right? But for some odd reason, I don't see the insurance industry making that claim. I don't know why they wouldn't point that out if it was the case.

So most of these ads are trying to frame the argument as "insurance companies versus evil, greedy trial lawyers". Unfortunately the referendum is really "insurance companies, do the damn job we pay you for". No one likes to lawyer up, and most of the clients don't have lawyers when things start to turn messy (the insurance companies, on the other hand, do).

Seriously, this places a small cudgel above the insurance industry's head, only because there is enough evidence to show that the companies, in the interest of keeping their money, will often weasel out of their agreements and as a result help create the very suffering that insurance is supposed to relieve. The ease at which "insurance company horror stories" show up is pretty amazing. Not only do you hear them in place like the comments section from this Robert Mak piece, but also from the insurance companies' own commercials. Just think about it, guys - you run ads that say that other insurance companies are a bunch of soulless bean-counting crooks, and you wonder why people get the idea that insurance companies in general may not looking out for our best interests.

And let me go back to that entire "Raise our rates" threat - does this mean that if we vote this down, our rates will NOT go up in the next five years? Anyone in the insurance industry want to make THAT promise? Didn't think so.

I think that the great bulk of us unwashed-but-still-insured masses have pretty good service from their insurance companies, but the added protection that this law will add would be a generally good thing. The Greedy Lawyer angle is a straw man, a distraction for the matters at hand,a boogie man created to scare you out of the services you pay for.

And just in time for Halloween, too. In the meantime, ignore the scare tactics and vote YES on R-68

More later,