The Problem with Insurance Companies

Have you ever met anyone who loves their insurance company? Probably not. Be it home, business, car, or health insurance, you’d be hard-pressed to find an industry that more people complain about – and here’s why. Insurance costs us a lot of money each year and then when we need to use it, it’s rarely easy and straightforward.  Need a specialized medical procedure? It won’t be covered unless you file an appeal and get help from your doctor’s office verifying that the procedure is “medically necessary.” Were you in a car crash and then told that your rates will go up if you make a claim? Is your roof on the older side and your new homeowners insurance company tells you it won’t cover any repairs?   These are tales as old as the insurance industry itself. 

Every year our insurance premiums go up. And the problem I have with the insurance industry is that it wants you to think increased costs are due to lawsuit abuse. That couldn’t be further from the truth. Frivolous lawsuits do not exist. Period. Think about it – why would a lawyer take a case that will cost thousands of dollars to prosecute if they know they’ll lose? They wouldn’t because then they would lose all the money they put into the case. 

For decades, I’ve helped grieving families and injured people earn justice by forcing insurance companies to pay monetary damages when their insureds are negligent – they run a red light, drive while drunk, commit medical malpractice, fail to keep their nursing home residents safe, etc.  Insurance companies never voluntarily pay money to an injured person. In order to get full and fair compensation, there’s always a fight.  

So let’s set the record straight and talk about the problem with insurance companies.

The real problem: Profits over people

Insurance companies are in business to make money. So if they can make a few more bucks to keep their stakeholders happy at your expense, they’ll usually do it. 

According to a recent report from WSJ, the insurance industry as a whole has seen record profits as of late, thanks to steep rate hikes. Despite some of the pandemic woes over the last few years, insurance companies report that they see a “light at the end of the tunnel”, so to speak — surely a bad omen for those of us that are impacted by executive decision making: 

“. . .insurers say they now see a path to profitability for home and auto policies. Big rate increases are driving up revenue, while the inflationary pressures that pushed up repair and replacement costs appear to be easing. Losses from extreme weather tied to climate change remain a wild card, but the short-term outlook for insurers appears more favorable.”

Meanwhile average consumers are finding that they have fewer coverage insurance choices, less coverage in general, and higher costs to boot. 

The very same WSJ article mentions home insurers in North Carolina, who are lobbying for a 42% increase in premiums for homes in coastal counties, which would take the average annual premium from $3,427 to $6,833. This is just one localized example of a phenomenon that’s been happening for decades.

If insurance companies actually paid out all these so-called “frivolous lawsuits,” they wouldn’t be posting record profits. The fact of the matter is insurance companies and their shareholders are earning more than they ever have been — they just don’t want you to know it. 

The prevalence of frivolous lawsuits

The insurance industry would have you believe that your rate hikes are due to low level attorneys gaming the system through frivolous litigation. But that just doesn’t happen. 

So let’s take a closer look at what the data shows. The National Center for State Courts (NCSC) estimated in 2015 that only two out of 1,000 Americans filed a tort lawsuit (also referred to as a personal injury lawsuit) and that less than five percent of all civil lawsuits are torts. This is significantly down from 1993, a year in which around 10 in 1,000 Americans brought about tort lawsuits. Additionally, around half of all civil cases are actually filed by corporations against people, mostly for debt collection and mortgage foreclosure. Over time, people are less and less likely to file tort suits altogether. But why?

What it boils down to is corporate lobbyists discouraging the general public from filing lawsuits by playing on their good nature. You may not even want to file a personal injury lawsuit if you’re meant to feel that you’re gaming the system, when in fact you’re only seeking to recover the damages that you’re rightfully owed. 

This mentality has proliferated through our general consciousness. Corporate PR teams are well-versed in spinning the most basic cases to make plaintiffs look like the bad guys. Take, for example, the infamous McDonald’s hot coffee lawsuit, Liebeck vs. McDonald’s restaurants. If you’re old enough and remember this case, what is the first thought that comes to mind? Chances are, it’s “frivolous lawsuit.” McDonald’s PR teams were able to spin the case toward a general sentiment of “a woman sued a McDonald’s restaurant because her coffee was too hot.” They had the general public scoffing at her greed — ABC News called the case “the poster child of excessive lawsuits,” when the reality is it’s the poster child of successful PR campaigns.

What you may not know is the coffee was so hot, Ms. Liebeck suffered third-degree burns in her pelvic region after spilling it, was hospitalized for eight days where she underwent skin grafting, and suffered a subsequent two-year treatment and recovery period. Franchisees were instructed to keep the coffee at 180-190 degrees Fahrenheit, when that is far hotter than a reasonably hot cup of coffee. Nevertheless, anyone who has seen images of the burns for themselves could see she was entitled to having her medical bills covered, at the very least.

The reality is sensational headlines are more engaging than the facts of these cases. By painting a picture of a frivolous lawsuit, they taint the public’s perception and rake in record profits while we all eat the costs. 

Lewis Law Firm fights insurance companies on your behalf

So if you’ve been injured due to someone else’s negligence, don’t let the insurance companies get the better of you; and don’t feel ashamed to file a lawsuit. You’re entitled to compensatory damages to cover medical bills, lost wages, and any other expenses you’ve suffered as a result of your injury.

While people may attempt to file frivolous lawsuits once in a blue moon, they are never taken on by attorneys who value their time, making them far less prevalent than insurance companies want you to think. So take the plunge and schedule a free consultation today to find out if you’re entitled to compensation.

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