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Insurance companies are notorious for collecting premiums and then refusing to pay valid claims. When they do not pay, in many states, the worst thing that can happen to them when they are sued, is to pay the claim they should have paid in the first place. Enlightened states have passed what are known as “bad faith” laws that hold bad insurance companies personally responsible when then act in bad faith. Those companies who act in good faith have nothing to fear by this legislation. Pennsylvania and many other states have excellent laws that haven’t hurt the carriers’ profits one bit. It’s time other states, like New Jersey, adopt such a law.

The issue is currently a hot one in the State of Washington as well. Sources from within the industry have said that insurance companies treat claims differently depending on whether or not the state has a bad faith law. That’s not right and it is something that needs to be changed by legislation. While they’re at it, it’s long past time for the anti-trust exemptions that the insurance companies have had since the 1940’s, be taken away from them. No other industry is immune from anti-trust laws except Major League Baseball and the insurance industry. There is no longer any valid reason for this to continue and the McCarren-Ferguson Act needs to be repealed.

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