As we’ve explained – along with countless independent researchers and analysts – tort reform will have little if any effect on insurance rates. And again, don’t just take our word for it; when pushed, insurers and even tort reform advocates have been forced to admit it:

Tort reform will not lower rates.-Ohio Health Insurance Company

[T]he insurance industry never promised that tort reform would achieve specific premium savings.-American Insurance Association

We wouldn’t tell you or anyone that the reason to pass tort reform would be to reduce insurance rates.-American Tort Reform Association

So what can we do to combat arbitrary rate hikes and unfair claim denials? Fundamentally reform the insurance industry.

The insurance industry is “one of the least regulated, most influential, most profitable, and most unaccountable industries in the nation, answering to no federal agency and regulated by mostly weak state agencies.” State insurance departments, typically underfunded and without the clout to effect real change, have little ability to reign in out-of-control insurers.

Joanne Doroshow of the Center for Justice & Democracy detailed how the insurance industry received its mandate from the government, and how it’s abused that mandate at every opportunity. In 1945, Congress passed the McCarran-Ferguson Act, which gave the industry power to fix prices, collude with each other, and discourage competition. The intention behind exempting insurers from federal anti-trust laws was to empower states to regulate insurers instead. Unfortunately, though, state regulators haven’t stepped up, and without federal protections, the industry has unabashedly indulged in “skyrocketing rates and profiteering within the property/casualty insurance sector,” which includes auto insurance.

Unfortunately, states haven’t stepped up to regulate the industry, either. Most are dramatically underfunded and therefore unable to effect real change. Also, they’re unwilling to confront “an industry capable of threatening major damage to a state’s economy.” If insurers pulled out of the market en masse – as they’ve threatened to do – the results could be catastrophic. Not content to rely on threats alone, the industry works hard to curry the favor of lawmakers who could vote to regulate it. Over the last three election cycles, insurance industry PACs have funneled more than $3 million into congressional campaign accounts. Their lobby is exceptionally well-funded, which gives them the political clout to get their way.

So without the federal or state governments regulating the insurance industry, why wouldn’t we expect them to run amok?

The only solution to skyrocketing rates and rejected claims is substantial, comprehensive insurance reform. Our legislators need to stand up for consumers, not special interests. Insurance reform will take courage, but if nothing is done soon, all of us will be made more unsafe because of it.