Oregon consumers have been victimized by insurers for too long. Why? Oregon’s Insurance regulations and laws have no teeth. Oregon needs a law that will punish insurers who delay, ignore or wrongfully deny claims made by their own customers.

Insurance is about trust. You paid premiums TRUSTING that when a viable claim occurs, the insurer will pay promptly according to contract. So, for insurance to work, insurers must process claims in GOOD FAITH. Good faith requires the insurer place the interests of its insured ahead of its own financial interests.

THE RUB: Insurers (especially publically traded insurers) are under significant financial pressure to deny claims. And, at the time of a loss, the policyholder is necessarily in a vulnerable position.

Insurers must have a financial incentive to act in GOOD FAITH because the tremendous temptations and rewards for acting in BAD FAITH. While Oregon does have unfair claims processing laws, Oregon law currently do not provide insurers with a financial incentive to act in GOOD FAITH.

Thus, Oregon needs to enact laws that financially PUNISH insurers who act in BAD FAITH (placing the insurer’s financial interests ahead of the insured’s interests). Punitive damages must be available to insureds who are victimized a second time by insurers who act in BAD FAITH. Without a threat of punitive (punishment) damages insurers have little financial incentive to act in GOOD FAITH.

As a further measure to dissuade insurers who skirt Oregon’s unfair claims practices act, ANY VIOLATION the act or an insurance regulation should be BAD FAITH at a matter of law, subjecting an insurer to possible punitive damages.

Natural disasters like Katrina demonstrate that insurers are motivated by money. Without these changes, folks in Oregon will continue to be victimized by powerful insurers at exactly the time help in needed…when a loss occurs.

If you are frustrated by insurers who have taken advantage of Oregon’s lax insurance regulatory scheme Demand that Oregon enact a BAD FAITH law that punishes insurers for unfair claims acts. Since this is an election year, we might just enact positive change for the Oregon insurance consumer.