Reining in the rogues of risk
One of the worst days of my life was the day my insurance company sued me.
I can still remember the call from my attorney.
'USF and G has filed a 'dec-action,'' he said.
'A what action?' I replied.
He explained that the insurance company - USF and G - wanted a declaration from a judge absolving them from any liability in a claim brought against the newspaper by a politician for an uncomplimentary editorial.
The insurance company's claim was in many ways scarier than the underlying claim, which we knew was bogus. The question was, would a jury agree? If not, the newspaper would be potentially exposed to six-figure losses and no recourse.
Fortunately, the insurance company didn't get its dec-action and the politician lost his claim - first in circuit court, then at the court of appeals, and finally at the Oregon Supreme Court. This particular politician was thin-skinned, thickheaded and stubborn as a mule. He also had more dollars than sense, which made him a dangerous adversary.
The real scoundrel, though, was the insurance company, who for years was happy to take our money. Unfortunately, when the metaphorical house burned down not only was the insurance company no help, they were part of the problem. In football this phenomenon is known as piling on. In fighting, they call it kicking a guy when he is down. That's what insurance companies do rather well - they kick people when they are down. They're somewhere between banks and railroads companies when it comes to having a conscience.
I had another run-in with an insurance company a couple months ago after the big rainstorms that deluged this part of Oregon. Fortunately, the damage at our house was nothing compared to some of the destruction we saw in St. Helens and Vernonia. Ours was a couple of leaks where some shingles fell or blew off, with a little dry rot underneath.
Not to worry, though, because at the insistence of our realtor, the people who sold us our house had provided us with a home warranty provided by an insurance company out of Texas called Warrantech. Thanks to this policy, our place was bullet proof … or so we thought until we read the fine print, which revealed that roof repairs were limited to $500, which in this day and age doesn't go very far. Disappointed at the paltry sum, we decided to make a claim for the $500 anyway. What the heck; every little bit helps, right?
After submitting three estimates from roofing contractors, Warrantech issued their verdict: 'Claim denied.'
The woman on the other end of the phone explained that, according to the terms of the policy, coverage is denied if any shingles are missing, and at least two of the roofing company bids had noted that two or three shingles were gone.
In other words, the home warranty, which in essence is an insurance policy, wasn't worth the paper it was printed on. It served its intended purpose by providing a false sense of security when we bought the house, but when it came time for the insurance company to hold up their end, we were sorely disappointed.
I cannot even begin to comprehend the outrage, bitterness and disappointment people in St. Helens and Vernonia must be feeling toward their insurance companies in the aftermath of the December floods.
During a town hall meeting in Vernonia in January, several local residents told horror stories about how they'd been worked over by insurance adjusters, who low-balled their claims or denied them altogether because they did not have sufficient documentation of their losses. We've since spoken to several other area residents who've conveyed similar nightmares.
We tried to pin down County City Insurance Services, one of the main non-players in this debacle, and they've refused to answer four or five of our phone calls. I can understand why they don't want to talk to us. If I had their track record, I wouldn't want it printed in the newspaper, either. What I don't understand is why our local government officials continue to send business their way. They certainly haven't earned it.
The sad part is County City Insurance is probably no worse than USF and G, Warrantech or the 'good hands people.' They're all in it to steal as much money as they can get away with, and no amount of arguing, begging or threatening is going to change that.
Probably the best, and maybe the only, solutions are legislative. Those solutions should include protection policies that ordinary citizens can read and understand, protection against skyrocketing rates, reduced coverage and arbitrary cancellations, tough licensing requirements and criminal penalties and an aggressive disciplinary board with extensive citizen access and involvement.
Insurance companies get paid to manage risk, not eliminate it.