August 5, 2002

Dear Insurance Executive:

Welcome. The fact that you have decided to visit the only site dedicated to the very people who make your business possible - your customers - speaks well for you. We encourage you to monitor the activities of Policyholders of America and visit the site often. That is probably the only way you can truly improve the quality of service you provide and avoid problems in the future.

Now that you are here, we would like to tell you a few things about our association, our goals and members.

Perhaps surprising to you, POA is a conservative group. As of today, we have nearly 19,000 American families in our membership. That's a lot considering we began taking memberships only six months ago. All of our members are homeowners who have been victimized by wrongful delays, denials and disputes over coverage. In every situation, the actions of the insurance company involved turned simple water damage into massive toxic mold infestations. None of us wanted to get into a pissing match with our insurance company. We were content with our lives and are not litigious people. But, none of us are going to lay down and let someone or something run all over the top of us, destroy our property and health and then blame us for the problem.

Our goal is not to cause financial turmoil. We want insurance companies to be healthy and strong. Otherwise, you could not pay claims. However, we are adamantly against bad faith and fraud, regardless of who commits it. Unfortunately, our group sees far too many instances where the insurance company did not honor its policy and the result was the destruction of property and health. We've seen an insurer spend millions to defend their actions on a covered peril that would have cost 5% of that amount had the insurer honored the policy. This behavior must stop. Policies must be honored.

The good news is that there are only a handful of insurers who are account for 85% of the bad faith/fraud claims on our database. Those of you who have opted to circle the wagons and protect these habitual perpetrators might want to reconsider this strategy. Learn from recent events - Arthur Anderson, for example. Anderson was a bad actor and it negatively impacted an entire industry.

Instead of rallying around the bad actors, POA suggests that you treat the habitual perpetrators as pariahs. Hold these insurers out as examples of what not to do. Learn from mistakes made by a few insurers who have negatively impacted the industry at large by refusing to honor their policies.

POA invites you to work with us to strengthen the industry and improve its public image. You will find that we aren't proponents of litigation and that we do not recommend experts who overstate or exaggerate damage. In fact, POA Approved Contractors must sign a pledge of professionalism that states they will not act as advocates for either party. I encourage you to review our pledge.

A fair shake is what POA members expect from their insurer. Nothing more. Nothing less. Many insurers - large and small - have proven to be responsible and honorable. Those insurers will be rewarded. Others who habitually resort to bad faith and/or fraud to avoid their contractual obligations and betray the very people who count on them the most, will be punished.

We welcome a dialogue and wish to hell your industry would get their act together so that there is no need for an association like POA. We will happily fade away if and when the bad actors in your industry stop committing bad faith and/or fraud against their customers.

Until then, like it or not, we will be active and our numbers make us a political force that candidates and elected officials simply cannot ignore. It would not be wise for you to ignore us either.

Yours truly,

Melinda Ballard
President
Policyholders of America