Buying Insurance From Out of State

Buying out of state insurance can be risky. The perils associated with buying across state lines are endless. You are open to swindles and crooks but are left defenseless.

The GA House has passed a bill to allow residents of Georgia to buy insurance from out of state vendors. Their argument is, making out of state insurance available will introduce more competition and lower prices.

This only serves to show how out of touch these people are.

If the bill becomes law, here are some considerations they never evaluated.

The DOI (Dept. of Insurance) doesn't have the budget or manpower to police legal policies sold now. Of course we have plenty of junk policies of all flavors already bought and sold here so this will be a carnival.

If you buy a policy from an out of state vendor and there are issues, don't expect the GA DOI to come to your rescue. They lack the jurisdiction to regulate or police policies sold from another state.

Selling across state lines never made much sense to me.

If a state is going to allow carriers to sell policies from other states that don't meet our mandates, then why not just grant the same flexibility to carriers already selling here.

If this passes, expect some major push back from current carriers, especially those that dominate certain markets already.

This is not just for health, but any kind of insurance. BCBSGA already has problems with Humana, Coventry and others. Now if they have to compete with carriers from other states they won't be happy.

Seems even more wide open for auto insurance.

If this takes off, they have shot themselves in the foot since business sold by agents from other states could reduce income of resident agents. We have an income tax here but I don't think it would apply to non-resident agents.

Of course lost income for GA agents means not only lower income tax collections, but less money to spend on things like gas and retail items that generate fuel and sales tax revenue.

I believe this is the law of unintended consequences at work.

This is incredibly stupid but no more so than any of the ideas about how insurance should work that has come out of Washington, DC.

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