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Transamerica Lawsuit – Why Does it Happen to Everyone?

Transamerica Lawsuit – Why Does it Happen to Everyone?

Many of us, myself included, have just recently come to know of what’s commonly called the Transamerica Lawsuit. It all began back in 2021 when a loyal customer, Carol, was informed by her insurance agent that she would be receiving a new policy with an entirely different carrier.

Carol was surprised to learn that her new premium was over 400 percent higher than what she’d paid the previous year. Not having much information on this new policy, Carol was understandably confused. After a little research, Carol realized that this was not at all common for her situation.

Transamerica Lawsuit

With this new policy, Carol had been paying extremely high premiums for several years; something that she knew nothing about. Although there was no increase in the policy rates or the deductibles, Carol still believed that something was wrong. So, what exactly was the basis for this lawsuit?

Apparently, many “insurance companies” will raise the deductibles and premiums in order to compensate themselves for the “losses” they have sustained as a result of “marketing loss”.

This basically means that you are paying higher insurance rates because the insurance companies think they are losing money on your part! In addition, these premium increases are meant to reduce their “write-offs”, i.e., the amounts paid out in lawsuits. The insurance companies’ primary goal is to ensure that they don’t lose any money, and one way they do this is by taking away more of your money from you in the form of higher premiums.

A Transamerica lawsuit referenced in the news is one that was brought against three different New York based carriers: Allstate, GEICO and Metlife.

In this case, the plaintiff was awarded $1.75 million due to the higher premiums that each of the aforementioned policies had been charging. The story did not mention the specific amount that was due in this case, but it was found that the total award was higher due to the fact that the plaintiffs were spread across the entire state. Considering the fact that the state where the original lawsuit was filed resides, this awarded sum is quite substantial.

What many people may not know about these types of lawsuits is that they can be brought against many other insurers.

While most people associate insurance companies with helping policyholders with huge monetary liabilities, they can also be ordered to pay a portion of the settlements they receive. In a case like the one referenced in the news, the insurance carriers actually receive less than half of the total settlement. Despite the fact that this kind of percentage drop off is not acceptable for policyholders, they should know that this interest rate hike could happen to them as well, and is something that they need to be aware of.

The most common form of Transamerica lawsuit occurs when the company increases the interest rates on two separate loans that are held by policyholders.

This usually happens when the company increases the interest rate on its universal life policies or on any credit cards that it holds. In the past, it has always been difficult for policyholders to understand when an increase in their interest rate is temporary and is done only as a result of economic forces.

However, recent changes to the Internal Revenue Code have made things much easier for them. Now, when a company increases the interest rate on a loan that it holds, it must inform the insured party about this change. It must also provide written notice that will allow the insured party time to adjust its expenses and begin to reduce the liability that is owed to them.

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