One astute reader asks how we can fix insurance company bad faith and fraud
Last week, Art wrote a great question in response to my blog on the rampant insurance fraud and abuse that exists from the auto insurance companies in Michigan today:
What can one do to protect against insurance company fraud in Michigan?
Auto accident victims in this state walk away from millions of dollars in valid and deserving No Fault claims that the auto insurance companies are legally and contractually obligated to pay. Many of these auto insurance companies use strategies such as delay, deny, and defend, hoping you become so exasperated or so fed up that you walk away. Or take a low-ball offer from the insurance company. Or won’t hire an experienced auto No Fault lawyer to file a lawsuit.
The real-life examples I give every year from real clients in my review of the best and worst auto insurance companies are only the tip of the iceberg. This is happening to thousands of people hurt in auto accidents every year.
To answer Art’s question, these real-life examples scream out why Michigan must have bad faith insurance laws and punitive damages to deter such bad behavior.
Without a “big stick,” these claims adjusters and insurance companies will still be financially incentivized to ignore what they are legally obligated to pay, because on a macroeconomic level, they’re saving millions of dollars every year doing so. Only bad faith and punitive damages laws can take this glaring and perverse economic incentive to hurt people away from insurance companies.
We should have the same laws that exist in virtually all other states to protect people here in Michigan. But we don’t. And as long as our Republican Legislature is more concerned with listening to the insurance industry than they are with protecting Michigan citizens, these types of insurance claims abuses will continue. So in answer to Art’s question, this is what Michigan consumers can do to help:
Please write a letter to your local representative and ask that bad faith insurance laws be introduced in Michigan to protect against insurance company fraud and abuse.
Michigan needs bad faith laws.
Michigan needs punitive damages.
Michigan needs a Consumer Protection Act that actually can protect consumers from insurance company abuse.
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