Over a week ago, it was reported that the Senate had approved, albeit tentatively, a measure to restrict a homeowners ability to sue an insurance company.
The restriction was written up by Senator Larry Taylor, and as if it wasn’t obvious, strongly supported by a number of insurance companies. The opposition to these new measures came in the form of trial lawyers and consumer groups.
Looking at the issue objectively, it could seem like the insurance companies are the bad guys. However, parties on both sides seem to agree that the ever-growing number of lawsuits from home owners have become an issue tied in with the restrictive measures, and the restrictions need to be changed.
Senator Larry Taylor alluded to other issues driven by the increasing number of lawsuits, claiming that they cause premiums to rise across the state. Larry elaborates saying, “In some areas of the state, we are seeing litigation rates of 25 to 30 percent for some insurance carriers. This litigation has not been generated by consumers who are upset with handling of their claims.”
Taylor also blames lawyers, adjusters and roofers for capitalizing on the hail storms claiming they are going “door to door and making phone solicitations to find people to join in this litigation effort.” The ensuing lawsuits from such a collaborated effort tend to push insurers to settle for farm more than the damage caused.
Senator Rodney Ellis makes the claim that if the bill passes it may discourage homeowners from going to court for legitimate insurance claims and end up getting low-balled into lower settlements.
Although the trial lawyers and consumer groups involved have acknowledge that abuse with the lawsuits exists, they are more concerned with the bill which they claim heavily favors insurance companies and would deprive insurance carriers of relief in dealing with unpaid property claims.
If the history of politics can tell us anything, it’s that these types of bills can be pushed to the benefit of a few. With this one, it seems only time will tell whether it will help or allow for abuse.
What do you think? Are the insurance companies likely to abuse this new bill or is it necessary to stem the abuse from homeowners?