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Industry Lies Volume IV: Frivolous Lawsuits are to Blame for Your Rising Insurance Costs
This blog is the fourth installment in the “Industry Lies” series intended to dispel the myths of tort law.
You’ve got to hand it to the insurance companies.It is one of the few industries that can successfully come across as a victim of skyrocketing lawsuits while quietly making more money than they know what to do with. These companies have put massive amounts of dollars behind marketing campaigns that focus the blame for rising insurance coverage premiums on the frivolous lawsuits that supposedly flood the justice system. In many states, these campaigns have been successful in obtaining limits to the amount of money a person can receive from his or her lawsuit — even when the reason for the lawsuit has been serious injury or death. The insurance industry has painted the people filing these lawsuits as the ones responsible for rising insurance costs.
The truth, however, is something far different.
Unfortunately, people in the U.S. are experiencing a rise in insurance premiums with no end in sight. Naturally, people have gone looking for answers as to why they must continue to pay more, and the insurance industry has been happy to point the finger in every direction but at themselves. The truth is, while your insurance premiums keep taking more and more of your income, the insurance companies continue to make record profits. In fact, the insurance industry reported near-record profits of $61.9 billion in 2007. This was a major increase from the industry’s 2004 profit of 38.7 billion, which broke all previous records.
Yet, despite these massive profit gains, the insurance industry continues to argue that government should cap the amount of awards and damages that are given to plaintiffs in order to control rising premium costs.
But would it really stop the increase in insurance costs if we limited the amount of money people can receive from lawsuits — especially when it is money that is awarded to people that have experienced injury, or even death, as a result of the wrongful doing of certain companies?
According to the insurance industry, the answer is no.
Across the board, the insurance industry has admitted that caps on money given to people who have experienced damages or injury would not do anything to lower premiums. Dennis Kelly, spokesperson for the American Insurance Association, told the Chicago Tribune that the insurance industry does not promise price reductions with tort reform — meaning caps on the money that can be given to a plaintiff.
So if lawsuits aren’t to blame for rising insurance costs, why is the insurance industry so determined to alter the U.S. justice system and impede the rights of the American public? The answer is simple.The insurance industry wants to continue to increase their profit and will do so at the expense of people who have potentially suffered injustice.
Don’t let the insurance companies deceive you into believing that lawsuits should be limited so that you pay less. Access to the U.S. justice system is a right that everyone should be afforded. The insurance industry should not be able to limit the amount of money you can receive if a judge and jury decide it’s the amount you deserve.
The plaintiff’s law firm of Baron and Budd is dedicated to protecting people from the negligent practices of corporations. For over 35 years, the firm has been helping people understand the truth behind the lies of big business interests. For more information on Baron and Budd, visit here.