Premium Deceit

In the 1990’s there was a strong push for “tort reform” in response to very high rates of insurance for businesses, medical professionals and other professional practices that require some form of liability insurance. Not only were these rates very high, but policies held by businesses that were deemed as insurance risks were being cancelled suddenly and without much cause. This was considered a crisis, and tort law reformers believed that a legal solution could be sought. In fact this was really motivated by insurance companies and Republican politicians who rely on these companies for a part of their campaign funding. Many republicans are also supported by industries frequently sued in personal injury cases: doctors, pharmaceutical companies, transportation companies, etc. In reality, injured persons are the people who suffer when a limit on damages has been instituted as they cannot recover the full amount necessary to pay their medical bills and financial losses. Contacting an experienced Personal Injury Attorney in Brooklyn can clear up any questions or concerns you might have about premium deceit and the options you may have.

The Tort Reform Argument

Those pushing for tort law reform hypothesized that the reason insurance rates were so high was because consumers had a great deal of freedom under tort law to sue in liability cases for very large sums of money. Since insurance companies were paying out these settlements and verdicts they “had to” charge high premiums in order to stay in business. The argument followed that if restrictions were placed upon tort laws to limited the amounts injured people could recover from lnjury lawsuits then premiums would fall because insurance companies were paying out less. This pressure on the legislators caused many states to enact tort reform laws that limited the payouts due injured persons and raised the requirements for winning a personal injury lawsuit.

The Results

The results of this tort reform have not been as promised. A review of the situation published in 1999 by the Center for Justice and Democracy found that tort law restrictions and premium rates did not have the hoped for correlation. It would logically follow that if tort reform was working then states with stricter reforms would see lower overall premium rates. This was not the case. In fact, it did not seem to matter at all whether had a state had tort reforms that were strict or none at all. Premium rates were generally the same across all states, regardless of laws.

The Verdict

These findings prove the case of the insurance industry’s victory over the average citizen’s right to be fairly compensated for their losses when injured to another person’s or business‘s negligence. In California, the “cap” on medical malpractice awards is $250,000 no matter how serious and life shattering the injury suffered. In fact, insurance premiums are not at all affected by tort laws or the number or size of lawsuits. Rather they operate on a general economic cycle. Periods of high premiums are eventually followed by periods of lower premiums and then again by periods of high premiums. It is all about how much money is flowing into the company. After a period of high rates, the company will have sufficient excess cash to lower their premiums and attract more customers. After a period of low rates, the company will start to show a earning deficit and will raise rates again. The 1990s situation was simply a period of very high rates, and it was followed by a period of low rates, but this lowering was not due to tort reform.

Speak to A Qualified Brooklyn Personal Injury Lawyer

If you have been injured and are wondering what compensation you are entitled to, then it is best to contact a qualified Brooklyn accident attorney to help you obtain the full and fair compensation you may deserve. While there are no official “caps “ or limits on personal injury and medical malpractice settlements and awards in New York, it is not easy to get the justice and compensation you may be entitled to. Jeffrey K. Kestenbaum is a highly qualified and experienced accident attorney in Brooklyn who handles a wide range of cases. Contact Mr. Kestenbaum at (718) 237-5586 to schedule a free consultation or fill out a form online regarding your case. He is only paid when he recovers money for your injuries. His commitment and work ethic reflects on his successful settlement and verdict track record. His office is located at 26 Court Street Suite 1806 in Brooklyn, New York, across from the Brooklyn Supreme Court.

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