AUSTIN – Consumers in Texas and across the nation are getting far less value for their auto and home insurance premiums these days while most insurers are seeing profits surge, according to a study released Thursday by leading consumer groups.
The report by the Consumer Federation of America estimated that the average family in the U.S. has been overcharged $870 for auto and home insurance over the last four years because companies have been charging excessive premiums and paying out proportionately less in claims.
"The insurance industry reaped record profits in 2004 and 2005 despite significant hurricane activity. Profits in 2006 rose to unprecedented heights and 2007 may set a fourth consecutive record," said the study's author, J. Robert Hunter, director of insurance for the CFA and a former Texas insurance commissioner.
"Unfortunately, a major reason why insurers have reported record-high profits and low losses in recent years is that they have been methodically overcharging customers, cutting back on coverage, underpaying claims and getting taxpayers to pick up some of the tab for risks the insurers should cover."
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