Here’s A Big Surprise: Tort Reform Didn’t Work (And Won’t)

If this comes as a surprise to anyone, perhaps you should seriously re-evaluate your opinions concerning the success of tort reform:

Four years after the Legislature took aim at runaway premiums for home insurance, two of Texas’ biggest insurers are battling state efforts to lower their rates, and sponsors of the 2003 insurance reform law say homeowners are still paying too much.

As Kyle on South Park once said, “Really?!?”

It doesn’t take a mystery novelist to have seen this one coming a mile away. We knew tort reform wouldn’t work. Why? Because a high number of lawsuit settlements isn’t what made insurance more expensive: it was a lack of regulation by this state and pure corporate greed that drove prices out of control, and which will keep prices out of control for some time to come:

State Farm and Allstate, the two largest property insurers in the state, have used their sizable legal staffs to fight the Texas Department of Insurance in various courts, allowing them to keep charging what state regulators say are inflated rates for their policies.

The companies argue that the state is overstepping its authority and trying to deny them the ability to have sufficient reserves for the massive weather-related losses that regularly plague Texas.

And, how can these companies argue the state is overstepping its authority? Could it be because the state’s insurance code was written and re-written by the insurance industry, giving them loopholes big enough to navigate a killer whale through? “Really?!?”

We all know that insurance company lawsuit settlements remained relatively moderate to stable in terms of growth for years while insurance premiums and insurance company profits still ran sky high. Major studies have show that the costs of “medical malpractice” suits were seriously overblown by insurance companies.

As the folks at the Progressive States Network said:

The only thing that has changed in the wake of “tort reform” are escalating corporate profits at the expense of consumer and workers’ pocketbooks — a triumph of using lobbying power to rob from working families to benefit the wealthy.

So true. So, so, so sadly true.

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