Insurance Companies Waging War Against Increased Punitive Payouts

It looks like insurance companies are keeping a close eye on a referendum in Washington state this fall that, if passed, would require them to pay out vastly larger punitive damage awards in the event they are found to have denied a claim that otherwise would have been covered. Should this referendum pass it would have a chilling effect on the rest of the country, most likely spreading to the rest of the states once passed by the voters up there and withstanding subsequent legal challenges. Say what you will about insurance and the companies that provide it, this is a perfect example of how government profoundly impacts the dollar amount the average business owner pays for their insurance coverage. We're all for holding a company's feet to the fire for our client's when the company misinterprets what should be a paid claim, but punitive damages as a whole, except in the most egregious of circumstances, end up hurting more than helping to keep insurance companies honest. In some cases actual covered causes of loss end up becoming standard exclusions as a result, thereby decreasing the value of the insurance product the consumer purchases. It will be interesting how this turns out. Hopefully the voters up there will see the forest through the trees.