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Premiums vs. Payouts

Texas Windstorm Insurance Association (TWIA) is in court in Galveston attempting to convince the Judge to order the Plaintiffs attorneys to turn over the total amount of fees they have made in representing people who had their hurricane claims denied or underpaid.  The TWIA has already tried to set the stage against the “greedy” plaintiffs lawyer.  There has also been talk about the legislature needing to know the amount of fees so they can possibly do something about them.  Here’s another crazy idea TWIA — evaluate the claims fairly and pay them timely and guess what there would be NO attorney fees.  What a novel idea.  An insurance company actually paying a claim.  I realize it is a shock to the insurance world that someone would ever suggest that they do anything other than collect premiums, but normal people actually expect to be covered in exchange for all the money they have paid over the years and they get a little upset when after having their $150,00.00 home destroyed that you want to write them a check for well below the value or that you tell them that the fact that their roof blew off is just a coincidence that it happened after a hurricane.

Sorry I drifted off into the world of how normal people think and not the land of insurance where intelligent life is scarce.  So instead of just paying the claims and avoiding the lawsuits and attorney fees completely, the insurance companies whine and moan about how much money the attorneys who are representing their insured’s are making.  They want to start an investigation into the amount of fees and make it all public.  What they really want to do is create a smoke screen where they can hide.  They want to use their same old “greedy lawyers” argument and hope that it gets people to forget that they have made millions (if not billions) of dollars off the people of this state in premiums and then refused to pay the claims.

The only time you generally need insurance is when something bad happens.  The only time you generally need a lawyer is when someone has done something they shouldn’t have.  I see a correlation here.  It does not seem to be apparent to the insurance industry.  So why should that surprise us?  Instead of hearings on attorney fees paid out, how about hearings and an investigation into how to prevent this type of abuse by the insurance companies in the future.  Make the failure of an insurance company to pay a valid claim a claim in which not only can the person who paid their premiums get their attorney fees and the real value of the claim, but punitive damages or an automatic 10x the claim value.  Maybe that will get the insurance companies to do what is right in the first place.

I do have some questions of my own:  How much did the insurance companies make off of Texans in the last 10 years?  How much did they make off of interest in the premiums they have kept and money they have not paid out for the hurricane claims?  How much do they pay their lobbyists and others who try and convince our representatives to “protect” them (in other words don’t make us actually pay any claims or worst case let us delay them for years and then only pay the very minimum)?  Which representatives received money from the insurance companies and how much?

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Categories: Business Disputes
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