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Mobile, Alabama Personal Injury Lawyer Blog | Long & Waite

Thursday, September 25, 2008

What AIG Bailout Tells Us About Insurance Companies

You might think that insurance companies take your premiums and save them to pay both their operating expenses and the money they owe on claims made against insurance policies, but you would be wrong. Instead, insurance companies take your premiums and gamble them on bonds and on the stock markets. Some people allege that the premiums you pay for your insurance are related not primarily to the amount an insurance company pays out in claims, but, instead, are tied to the insurance company's return on its other investments. Although the situation is too complicated to evaluate the overall strength of this claim, we can consider the bailout of insurer American International Group (AIG) as an example.

Although AIG makes a great deal of its money writing policies and collecting premiums, it has a number of different branches. And one of these branches is an investment branch known as AIG Financial Products, which buys bad debt from banks, hedge funds, and others to protect them against loans gone bad. Well, needless to say in this market, that kind of business can quickly go from bad to worse, and, as in the case of AIG, lead to financial ruin.

What does this mean for you? It puts the lie to bad faith insurance. All the while the insurer is denying your auto accident claim, dragging their feet, and fighting you in court, they are playing your money and that of your neighbors on the roulette wheel of the economy, hoping to take home record profits. But when those profits go away, who ends up paying the bill? Not the insurance company, but you, either in the form of higher premiums or billion-dollar bailouts.

Don't let your insurance company push you around. If they are denying your legitimate claim, enlist the aid of someone who can help. The bad faith insurance lawyers at Long & Waite, Attorneys at Law, P.C. have the experience, the skill, and the resources to take on the big insurance companies. Contact us today for a free, no obligation case evaluation.

posted by Dr. Candelaria at 2:48 PM