Editorial: Insurance

Proposed reforms could ease burden on home, vehicle owners

The Register-Herald, August 27, 2004

It's going to take more than talk to solve the mounting insurance woes in West Virginia , but at least state legislators are doing some listening. Tuesday, more than 100 people shared their concerns about homeowner and automobile insurance with lawmakers participating in an interim session at Glade Springs.

Residents disgruntled with premiums that nearly doubled within one year and discouraged with no hope in sight expressed their concerns. Lawmakers agreed there's a problem and blamed the state's insurance laws and court decisions that result in high payouts for insurers.

Representatives of insurance companies spoke about a dwindling insurance market that creates an additional cause of high premiums because of a lack of healthy competition. Insurers can drop clients for no reason other than they no longer want to do business with them.

It's no longer profitable to write policies in West Virginia , one insurer said. All of these factors make insurance less available and more expensive. Senior citizens on fixed incomes are often forced to choose between paying their homeowner's insurance or paying for prescription drugs and medical expenses.

Two proposed laws under consideration by legislators could offer some relief. One limits when insurers can refuse to renew home and auto policies. This would be especially helpful for policyholders who do not file frequent claims, but have been dropped by their insurer anyway. The second favors the face value of a policy over the replacement value of the property insured. In West Virginia , insurers are forced to cover the total cost of the replacement value of the property insured and not the amount paid for the property.

Although lawmakers initiated some civil justice reforms in 2003 as a response to malpractice insurance concerns that were similar to those faced by home and vehicle owners, the consensus of this group is that more reforms are needed.

Whatever the cause, or causes, of the problem, it's clear that rising rates are not good for West Virginia consumers, insurance providers or our state's economy.

It's a problem that must be fixed. Influential parties need to keep talking to legislators, and lawmakers need to listen -- and act responsibly -- on what they hear.