Texas Consumer Organizations Criticize Farmer's Insurance Decision Action Underscores Need For Real Reform

FOR IMMEDIATE RELEASE
September 25, 2002

CONTACT:
Dan Lambe
512-381-1111
Rob Schneider
512-477-4431 ext.116
Consumers Union Southwest Regional Office

Texas Consumer Organizations Criticize
Farmer's Insurance Decision
Action Underscores Need for Real Reform

(Austin, TX--) The state's leading consumer organizations criticized Farmers Insurance today for its decision to pull out of the Texas homeowners insurance market, escalating the current insurance crisis.

"Farmers Insurance has taken billions of dollars in Texas consumers insurance premiums over the years. They're with us in the good times, but abandon Texans when the going gets tough," said Rob Schneider, Senior Staff Attorney for Consumers Union. "Their decision to pull out of the homeowners market as Texas is facing a real insurance crisis is irresponsible and short-sighted. Farmer's decision demonstrates the urgency for real insurance reform in Texas."

"This is a slap in the face to all Farmers Insurance consumers," said Dan Lambe, Executive Director of Texas Watch. "Farmers Insurance is simply using their power and leverage to hurt policyholders and bully the state of Texas. Our insurance system should never have gotten this far out of control. Now, more than ever, we need leaders willing to take back control of the reins and stop a crisis like this before it starts. We need leaders willing to stand up to bullying, not back down."

"Farmers Insurance is forcing their policyholders and all Texas insurance consumers to pay the price for their failure to properly handle water damage claims," said Lambe. "They are not only turning their backs on policyholders, but also their agents and employees who have worked so hard for the company."

"If we had improved insurance regulations as laid out in our 5-point insurance reform plan, no company would be able to do this to Texas policyholders," said Luis Wilmot, State Director Texas AARP. "This shows why it is more important than ever that we have comprehensive insurance regulation and oversight to protect Texas families and policyholders."

Consumers Union, Texas Watch and AARP recently unveiled a 5-point insurance reform legislative program to stop the insurance crisis gripping Texas. This plan includes measures to prevent market disruptions by requiring companies to file orderly withdrawal plans and penalizing companies that stop selling coverage or substantially limit new business for essential coverage.

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View Files Sorted By Office: Consumers Union OPI, New York - Washington DC Office
West Coast Regional Office - Southwest Regional Office - Consumer Policy Institute

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