Insurance Commissioner Takes a Stand

I wish it was the California Insurance Commissioner, but alas, it is in Michigan. The Michigan Supreme Court recently ruled that an insurance company can shorten a statute of limitations to file a claim by writing a shorter time limit into its policy. Nice.

The Michigan Office of Insurance and Financial Services recently voided any policy that contains such a provision. The thinking is that this is a consumer protection issue. Consumers do not read insurance policies. (You SHOULD read your policy, but you don't.) Even people who read it, do not understand it most of the time. Therefore, in order to protect consumers, Michigan policies are going to match state law.

I think this is a good idea. Insurance policies should not be written in such a way that consumers are given less than state law allows. Insurance policies should provide people with what they think they are buying - protection. If that protection is less than state law, then the insurance companies are manipulating the system for their own benefit, not the benefit of the policyholder. It is not like you can negotiate the terms of an insurance policy, after all.