So the semi-independent republic of Texas (big grin there) has imposed some caps on damages. The problem is that this is only one state. Large compaines and insurers operate in all 50. (Except for the weird insurance issues in New York.) The front line insurers can probably rate based on location. So at first this looks like a good deal for Texas. But most front line insurers are going to buy reinsurance for big claims. And that reinsurance is going to be priced based on the whole portfolio of insurance - all 50 (or 49) states. Since these big claims are most likely going to be covered by the reinsurance, the cost of that reinsurance isn't significantly affected by the award caps in Texas. There's 49 other states who can still have large awards.So it makes sense to me that there haven't been significant reductions in insurance costs. The problem needs a nationwide solution, not just one state. I think if there was a move among most of the states to adopt limits on awards similar to those in Texas, then we would start to see some change in premiums.Actually, a lot of states have implemented caps on awards, including California, Texas, Florida, Virginia, Massachusetts, Michigan and Illinois, to name some of the larger ones. There is a map on page 2 of this document that shows the states that have/haven't enacted caps and the level of the caps: http://www.rwjf.org/publications/synthesis/reports_and_briefs/pdf/no10_policybrief.pdfSo, this probably covers close to 50% of the population, if not 50% - I would have thought we would see some cost decrease by now if it were going to happen.AJ
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