Liberty Mutual Singing the Blues about Money

Thursday, August 30, 2012 | 0

Liberty Mutual singing the blues about money
Posted on August 15, 2012 by admin   

Michigan workers'comp lawyer explains how insurance companies are out to make a buck and why this comes at your expense.

I always chuckle when a television commercial comes on talking about how much insurance companies care. You would think these corporations are your best friends and only want what is best.

The truth is that selling insurance is a big business and the goal is to make money. Workers' comp insurance is just another product.

Insurance companies are not on your side and actively work against labor interests. This can be seen in political donations and lobbying efforts. The less benefits that need to be paid for a work injury, the more profit to make on the product.

Michigan has been hit especially hard by these special interest groups who have fought to make collecting benefits impossible. House Bill 5002 is a clear example. Insurance companies can now reduce or stop wage loss benefits based upon a job that isn’t even available.

So what is Liberty Mutual complaining about?

One of the strongest arguments for workers comp reform is to protect employers from the high costs of insurance. So now that Michigan employers pay less in benefits, premiums should be going down. Not so fast!

PropertyCasualty360.com reports that Liberty Mutual thinks rate levels are too low. State regulations that prohibit greater increases are to blame.

President and Chief Executive Officer David H. Long said, “I’m hard-pressed to come up with a state where pricing is adequate, off the top of my head.” As for company strategy, “We have no choice but to continue to push rate until we are comfortable with the pricing in commercial lines—and that is what we intend to do.”

How this affects your work comp

Insurance companies routinely deny benefits in Michigan. For example, Farm Bureau General Insurance Co. denied over 60% of its initial voluntary payment claims in 2011. The state average is closer to 9%.

Workers comp reform is not about lowering premiums. It’s about depriving injured workers of their benefits. So the next time someone tells you employer costs are out of control, tell them to stand up to the insurance industry instead of cutting your benefits.

<i>Alex Berman is the founder of Michigan Workers Comp Lawyers. This column was reprinted from the firm's blog.