What product do people pay good money for but are afraid to use?

Insurance. Many of my clients are convinced that their premiums will skyrocket or that their insurer will drop them outright if they make a claim. Despite being hurt due to the fault of another uninsured or underinsured driver, and despite paying premiums, month after month, and year after year, many people do not want to make claims with their own auto insurance company because they are concerned that they will be charged even more money down the road. How did this general consensus among policy holders come about?

Because the insurance industry has done an excellent job of instilling fear in their very own customers. My clients have reported claims representatives who have told them directly that their insurance premiums will increase if they make a claim. This is illegal. Any attempt to drop a policy holder or increase their insurance rates for making a claim is a violation of Louisiana law. Louisiana Revised Statute 22:1466 states:

(A) Insurers are not allowed to increase the insurance rate, add a new surcharge or increase an existing one, cancel or fail to renew motor vehicle insurance policies due to nonfault accidents.

What is more, if your insurance company does in fact drop you or increase your premiums, the law provides you with a right to sue your insurer for penalties and attorney fees. Subsection C of Louisiana Revised Statute 22:1466 states:

(C) If an insurer does violate the above section, then it is up to the insurer must refund the insured for the premium amount that exceeded the amount of the original premium that would have been paid if it had complied. In addition, there will be a penalty amount the insurer must pay that is equal to three times greater than the refund or at least one thousand dollars, depending upon whichever is greater.

Policy holders have the right to be properly informed regarding their rights under the policy they purchased. There is no reason why policy holders should be subjected to essentially non-negotiable insurance rates, and then have their premiums increased for simply asking their insurance company to live up to their agreement when a claim is made.