Infant Car Seats and Your Insurance Coverage

Consumer Reports has tested infant car seats and most have failed. Only 2 seats out of 15 got a rating of "good" or better.

Now that these ratings are available, you can expect a few things. First of all, many of these products will either be recalled or removed from the market. Second, consumers will vote with their dollars, and eliminate any seats which haven't been recalled. Finally, you can assume legislators may take action if the challenge presented by the Consumer Reports study isn't taken seriously by car seat makers.

Another thing you may see: insurers may decide to limit or negate insurance coverage if an "approved" seat is not used. While this stance has not yet been taken by insurers, the trend in the industry is to more and more aggressive (and exclusionary) underwriting and claims policy. Unfortunately, I can't see this changing, not while there are pressures on publicly-traded insurers to produce profit, each and every quarter, each and every year, year over year without fail.

As more insurers convert into publicly-traded companies, I predict less and less "customer relationship" focus. There will be less tolerance for claims, or consumers who make choices outside the norm. (Consider the increasing problem with getting insurance if you have a large breed of dog. I just recently answered a reader's question on this topic.)

In just the past 10 years, I've seen individuals lose their coverage because they have the audacity to make a claim.  This was unheard of previously. After all, isn't that exactly what you've bought? Insurance to cover you when you need to make a claim? To have your coverage terminated just because you've made use of the product is punitive and bordering on unethical. In fact, insurance as  a product is supposed to allow for claims; the premiums are supposed to provide enough money to the insurer to cover the cost of business, the payment of claims, and any profit for shareholders.

The pressure for profit every year, even when there could be an unexpected spike in claims, creates the desire on the part of the insurance company to "cut away" any additional risk. How better to do that than penalize those who actually make claims?

Monique L. Attinger

Insurance » Editor's Blog » Blog Archives : January 2007 » Infant Car Seats and Your Insurance Coverage