The assault on contracts, at least insurance contracts, in Mississippi is a fundamental problem for the insurance industry, and a recent article should be required reading for all insurance agents and brokers. Entitled A Contract Is a Contract, Right?, by Joe Nocera (see here, subscription required, and appearing on the front page of the business section on February 24, 2007), the article discusses State Farm's predicament in Mississippi.
As the largest writer of homeowners insurance in Mississippi, State Farm is being portrayed as the villain despite significant efforts to properly settle approximately 84,700 claims. Jim Hood, Mississippi AG, instituted a criminal investigation only three weeks after the hurricane. After a number of public and legal attacks which seem to completely ignore the policy wording, State Farm has decided to stop writing new home insurance policies in the state. The article points out:
- In Mississippi, the insurance contract has been largely tossed aside by the power of litigation
- Lawsuits, and the threat of lawsuits, are being used to get to a result that people want – even if it is not the result they originally agreed to.
Bottom line, State Farm is not getting a fair shake in the press or in the courts by the supposedly fair system, and therefore is backing away. If the insurance industry cannot count on a contract being upheld in the courts we, as agents and brokers, will not have any markets.
Note that this summary does not do the article justice. Please read a copy and pass it along.
See Martin Grace's links and comments here.
Specialty Insurance Expertise: Tennant Risk Services
Content © Worldwide Facilities, LLC, 2005 - 2019 | All Rights Reserved.