How to avoid insurance company overcharges
Insurance companies and some brokers may have been underwriting a high risk of catastrophic injury when they offered consumers low-interest rates on policies, according to a report by a consumer advocacy group.
In some cases, the rate was so low that the insurers themselves had to offer their customers a discount to compensate, the Consumers Union said.
The consumer group, which is also a critic of the auto industry, said in a statement that “the vast majority of insurers, regardless of their quality, are not able to protect consumers from overcharges.”
In an email to reporters, the company said that it “is aware of the report and is currently investigating the matter.”
The Consumers Union report cited a 2016 report from the nonprofit group Consumer Watchdog, which found that the industry had overcharged more than $2.4 trillion for consumer products in the years following the 2008 crash, including health care, personal care, retirement and food.
The Consumer Watchdogs report, which it described as a “review of the industry’s pricing practices in the wake of the financial crisis,” found that while the industry has improved its pricing practices, they still remain “inadequate.”
For instance, the report said that companies have offered discounts that range from a 10 percent discount to 15 percent to help lower the cost of medical care for low-income Americans.
The group found that in some cases consumers were paid back less than what was originally paid.
“Insurers and brokers often offer low-cost plans that often are not as generous as the best medical plans available in their communities,” the group said.
Consumers Union also said that “most of the companies that have been accused of misleading consumers are not in the top 25 nationwide, but instead in the bottom five,” which it said means “the majority of consumers are paying far less for a good-quality health care plan.”