Is Your Texas Insurer Peddling Snake Oil? Top Insurance Myths Part II

Disaster strikes, and you need your insurer. But are you ready to face the realities of your situation? Here are a few more insurance company half-truths that could put you in need of a Corpus Christi personal injury lawyer.

A Strained Definition of Loyalty

You might think that because you have paid your premiums year after year, your insurer might feel compelled to stick by you through thick and thin. Think again: for insurance companies, it is a matter of dollars and cents. In the latest example, the biggest insurer in Texas, State Farm, is declining to renew homeowner policies for 11,000 loyal customers across five Texas counties in an effort to lower the company’s exposure to risk.

True or False: Weathering a Storm Means Higher Rates

Some insurance companies would have you believe that the moment a storm hits, they need to raise premiums in order to make up for their payouts to customers. Yet, you have already paid them in advance for these expenses: actuaries working for insurance companies are well aware of the history of severe weather in Texas, and they figure the cost of potential storm damage into their projections that determine the rates you already pay. Insurers do not need to raise rates after a big storm, but it might give them a convenient excuse to do so.

Arbitration Is (Not) Better For Policyholders

Many insurance policies contain a clause, often hidden in the fine print, that any disputes between the insurance company and you, the policyholder, will be settled through arbitration. This means you may be unable to go to court if your insurer refuses to pay your valid claim, instead of having to settle for arbitration.

Insurers often claim that arbitration is better, cheaper and faster than court. It very well may be – for them. For individuals, arbitration can not only be costly, but it also deprives them of the procedural tools available in court that allow consumers to stand on equal footing with big insurance companies.

Stand Up For Your Rights, Whatever Insurers Say

It’s another tired slogan of the insurance industry: policyholder lawsuits increase premiums for everyone. Yet, insurers fail to point out how they cause disputes in the first place by delaying, denying and defending against valid claims. Rather than costing policyholders, legal actions are the one way they have to fight back and get the full benefits they are due.

Do not let insurers pull a fast one on you with their disinformation. Talk to an attorney today, and stay tuned for more on insurance company myths.

About the Author

LIVE CHAT