Tennessee Law changes Insurance Coverage

Tennessee lawmakers will vote today on a bill which would alter how insurance companies receive approval for changes from policy holders. This comes on the heels of legislation last year that is sure to make insurance company executives richer, while injured Tennesseans suffer.

This bill is very bad for consumers. House Bill 2454 essentially will bind consumers or small businesses to a change in their insurance policy by just the act of paying their bill.

"There are already too many instances of Insurance Bad Faith," said Daniel Clayton, former President of the Tennessee Association for Justice who practices with Kinnard Clayton & Beveridge. "If an insurance company is going to change the terms of the policy, the policy holder needs to be advised of those changes, and confirm he or she agrees to those changes."

Lawmakers say a recent Supreme Court ruling exposed a weakness in insurance policies which allows changes to be made to a consumer's policy without a signature or binding agreement. Mary Mancini, director of Tennessee Citizen Action, says Tennesseans' rights are being chipped away.

"There should be an agreement on those changes that are made within that contract that's agreed to by each party. This really takes away that ability in some instances for that consumer. "

As proposed, the bill assumes the policy holder agrees to a notified change once the payment is made. Lawmakers who support the legislation say it addresses the issue of customers who call their agent and request a change but come back later and dispute the change because they never signed anything.

The bill, Mancini says, would hurt not only consumers but also any entity which buys insurance - including small businesses which hire an administrative person to handle all their bill payments.

"Consumers or small-business owners would have to prove that they did not see any notice of or agree to the policy changes, and so this puts the responsibility of proving that on the consumer."