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According to a recent study written by the Consumer Federation of America and released in conjunction with a variety of consumer organizations, it has been determined that in 2007, property and casualty insurance companies continue the longstanding trend of charging too much money to their insurance customers and short changing claimants who presented injuries and damages to them for compensation. According to the study, every household in the United States was overcharged approximately $870.00 by the insurance companies being studied.

The author of the study is the Director of Insurance for the Consumer Federation of America and a former Texas Insurance Commissioner. Examining data from as early as 1980, he found that excessively high premiums resulted in higher profits for the insurance companies. By the end of 2006, liability insurance companies had reaped record profits in three consecutive years. For instance, the study found that in 2007, the ten largest insurance companies in the United States paid out only about one-half of the money that they received from their insurance premium customers in benefits. That relationship of premium to payout, called the lost ratio, has resulted in staggering profits for the ten largest liability insurance companies in the United States.

The study also found that these liability insurance companies have taken additional steps to minimize their risk by limiting coverage with caps, deductibles and policy cancellations.

The bottom line, the study concludes is that the insurance companies are charging consumers too much money for the amount of benefit that they are receiving.

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