9.08.2007

Annals of Capitalism

Attention unbought insurance regulators (you know who you were):

In Favor of Disruption - New York Times: "Homeowners often receive “30 to 60 percent of the cost of rebuilding a damaged home — even when carriers assure homeowners that they’re fully covered, thousands of complaints with state insurance department and civil court cases show,” write David Dietz and Darrell Preston in an article, “The Insurance Hoax.”

“Paying out less to victims of catastrophes has helped produce record profits,” they add. “In the past 12 years, insurance company net income has soared — even in the wake of Hurricane Katrina, the worst natural disaster in U.S. history. Property-casualty insurers, which cover damage to home and cars, reported their highest-ever profit of $73 billion last year.”

The writers say court records in some states show that property insurers “systematically deny and reduce” their policyholders’ claims and routinely refuse to pay market prices for homes and replacement contents and “use secret tactics to cheat homeowners.”

It's not news, exactly, but it can't hurt to be reminded of the soothing power of the invisible hand.
One tactic that insurance companies use, they say, is to put off paying for as long as possible, by delaying settlements and stalling court procedures brought against them by frustrated policyholders. "

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