The Consumer Federation of America (CFA) came out with a new study showing consumers pay most ever for insurance. Making matters worse, insurers are sitting on all-time record surplus levels and profitability for these companies is nearing an all-time high. This trend must stop, in the interest of both the consumers and the economy.
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Select portions of the CFA article are published below along with a link to the complete story. Read on for more information. Click on this link and subscribe to ValChoice so you can be kept up to date on issues like this and learn how to use social media to reign in excessive charges and minimal payouts by insurers.
Consumers Pay Most Ever for Insurance
“The data make it indisputably clear that insurance companies are overcharging their customers in order to rake in huge profits,” said J. Robert Hunter, the group’s director of insurance and a former consultant to Florida regulators.
Property and casualty insurers are sitting on a record surplus of $653 billion, the largest even after adjusting for inflation, Hunter said. Pre-tax income in 2013 was $64 billion — only 2006 and 2007 had higher profits, by his count.
Fair profits are fine, Hunter said. But he finds it “unacceptable for insurance companies to be squeezing so much profit out of consumers who are required by laws and financial institutions to buy coverage.”
Low- and moderate-income Americans struggle to afford auto insurance, he said, and many homeowners in states like Florida find property insurance takes a bigger bite from the family budget than they bargained for.
“Huge profits like those realized in 2013 raise serious questions about the adequacy of state regulation of insurance,” Hunter said.
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