Colorado Governor Bill Ritter recently signed House Bill 10-1168, also known as the Make Whole bill, into law. The new law offers more protection for consumers from unfair insurance practices, particularly those instituted by health insurance companies.

For example, if a person is injured in a car accident, the person at fault may not have enough insurance coverage or money to fully pay for the injured party’s healthcare costs, attorney fees, and other expenses. In the past, the health insurance companies covering injured parties required that they be reimbursed for their up-front payments before the injured party received any sort of compensation outside of medical bills. They levied this requirement even if it meant there would be no injured party compensation at all.

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If you’ve been in an auto accident recently, the CNN report “Auto Insurers Play Hardball in Minor-Crash Claims” probably sounds like business as usual. The report, published in February 2009, highlights the insurance industry strategy of deny, delay, defend.

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Many of us naively believe that our insurance providers, whether they provide medical, car or home insurance, are here to provide a level of protection for when an accident, illness or tragedy occurs. We assume that that because we’ve paid our premiums that the insurance companies will fulfill their promise to provide financial relief.

In a newly released report from The American Association for Justice (AAJ), “Tricks of the Trade: How Insurance Companies Deny, Delay, Confuse and Refuse”, describes the ways in which insurance companies boost their profits at the expense of consumers. This is a follow up of the AAJ report “The Ten Worst Insurance Companies in America”.

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We’ve all been there, or we know someone who has; feeling the frustration of waiting for an insurance company to decide on a claim, or seeing an offer that is substantially less then your expenses come in, or having a legitimate claim flatly denied. Sadly, up until recently, there was little that could be done about it. Sure, there were a few lawsuits that you could file, a few complaints you could make, but all of these had huge obstacles to success. Basically, unless things were horrendously and catastrophically bad, unless the insurance company was behaving in an almost criminal manner or endangering the public, there was nothing to be done. At the end of the day, you just had to take it.

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Flooding and no insurance coverage is about to become much more common in the Mississippi Gulf Coast. State Farm announced that it will not be renewing homeowners policies to those living within 1,000 feet of the beach and those between 1,000 and 2,500 feet will not be getting wind coverage renewed. Mike Chaney, the Mississippi Insurance Commissioner, is confident that people will be able to get coverage and states that rates may even decrease.

However, I am wondering, will it really decrease the rates. And will everyone be able to get covered? The real question is whether any other insurance companies will follow suit. If they do, basic economics tells us that the rates will go up. The less companies offering insurance to homeowners in that area, the less supply. People are unlikely to move at any significant number away from the area so demand will not substantially change. This will drive up the price. Also, if less companies are offering the insurance, the more risk they are taking on to pay out, so naturally the price would increase that homeowners pay for insurance. The fear of flooding without insurance coverage is well deserved for homeowners after Katrina, and with the recent developments up north in the Midwest.

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John Elway, the Hall of Fame Denver Broncos quarterback, recently made two of his younger kids sign a downloadable contract between parents and teenagers which promotes safe teen driving. Presently, Elway serves as a spokesperson for Allstate Insurance Co.’s teen safe driving campaign.
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Quick question. Do you really understand how your uninsured/underinsured motorist coverage (“UM/UIM”) currently works in Colorado?
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A seemingly innocuous proposed bill has recently come under attack by our very own Rocky Mountain News. (To read the editorial, click here). Senate Bill 248 is a bill that will exponentially help consumers and the medical community. It’s aimed at education and informed choice in the realm of medical malpractice insurance. SB 248 allows for a hearing in front of the Colorado insurance commission, upon request, only when an insurance carrier with a 65% or greater market share requests a global rate increase of 5% or more. What does this mean? It means that the larger medical malpractice insurers in the state would be required to actually inform its insureds if it decides to increase rates by 5% or more. This is a good thing because these measures, if implemented, would promote transparency and the free flow of information sharing. It ensures that doctors are informed when COPIC wants to increase rates of 5% or more and ensures that the increase is fair and reasonable given changing conditions. SB 248 protects doctors from unilateral rate increases not in line with the needs of Colorado’s medical community.
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The recent natural disaster to hit Colorado came as a complete shock to the residents of Holly, Colorado. Seeing images of the vast path of destruction the tornado left behind serves as a reminder that adequate home insurance coverage is necessary to begin to rebuild. Is your home insurance adequate? Here are some basic tips and links to help you determine whether you and your family are protected.
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CNN’s Anderson Cooper 360 Degrees aired a segment on February 26, 2007, called “Keeping them Honest.” This segment clearly shows what lengths State Farm and Allstate will go to avoid paying valid and legitimate claims.
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