We all pay insurance premiums for the right to be protected from the risks we face as drivers, homeowners, business owners and families. When you pay your premiums on time, you expect your insurance company will honor its commitment to you when you finally need it.
Sadly, the reality of the way some insurance companies treat their own customers is distressing. As customers, we pay premiums and rightly expect insurance companies to respond promptly and completely to our legitimate claims.
On the ballot this November is Referendum 67 — a measure that simply requires insurance companies to honor their commitments to their policyholders. R-67 is an incentive for the insurance industry to keep its promises. It creates penalties that help consumers when their insurance company unreasonably delays or denies a legitimate claim.
What currently happens when your insurance company delays or denies your claim? Some people go to the insurance commissioner. Every year, his office receives thousands of complaints from citizens whose insurance company has treated them unfairly. However, the insurance commissioner can’t force insurance companies to pay individual claims.
Current laws do not create any consequences for insurance companies who treat their own customers unfairly. Even if the claim eventually gets paid, the insurance company is only required to pay the claim it should have paid in the first place and nothing for the unreasonable delay or cost of getting it to eventually pay.
The delay and deny tactics some insurers use result in huge costs to consumers in the form of lost wages, unpaid bills, destroyed credit and lost business. Insurance isn’t cheap, and having to pay out of your own pocket for bills that your insurance company was responsible for paying is hard on a lot of families.
Consider the example of Sara Julin. A severe rainstorm in October 2003 collapsed the roof of her Bellingham home, causing around $10,000 in damage. Her insurance company paid for the interior damage but denied payment for the roof damage. In order to live in the house, Sara repaired the roof at her own expense.
Sara found more water damage months later — damage that should have been covered by her homeowner’s policy. Again, the insurance company denied the roof claim even though Sara’s policy said it was covered. Again, Sara had to pay for the expenses herself. After fighting her insurance company for three years, she had to take them to court.
Not everyone can afford to keep fighting. What protects families that settle for less than they were owed so they can pay their bills? Why should it take filing a lawsuit against their own insurance company just to get what they were owed in the first place?
Listen to the rhetoric of the opponents of Referendum 67 and it’s bound to be confusing. Insurance companies have contributed more than $9.7 million to confuse voters on the merits of R-67 with an onslaught of TV and radio advertising.
R-67 will mean that an insurance company will face real consequences for ignoring its obligations. If insurance companies are encouraged by R-67 to keep their promises to their policyholders, there will be no need for their customers to go to court. If the insurance company treats its customers fairly, there is no problem, no lawsuit and no rate increases based on litigation costs.
There is no guarantee that any lawsuit against an insurance company would result in huge awards under R-67. Lawsuits would still have to go before a judge and the consumer would have to prove that the insurance company had no reasonable basis to deny or delay the claim. Even if the customer can show bad faith, it is still up to an elected judge to decide whether and how much damages and fees are awarded.
Washington is one of only five states without a meaningful law to hold insurance companies accountable for unreasonably delaying or denying a legitimate claim by their own policyholders, and the insurance industry wants to keep it that way. This is a badly needed and just law.
R-67 has earned the support of Gov. Chris Greigoire, Insurance Commissioner Mike Kreidler and more than 85 organizations across the state, including seniors, consumers, veterans and firefighters.
I encourage you to join these organizations and individuals and vote to approve Referendum 67. You pay for insurance coverage and should get what you pay for.
Todd Nichols is an attorney in Everett.
Talk to us
> Give us your news tips.
> Send us a letter to the editor.
> More Herald contact information.
