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 Posted: Fri Mar 07, 2008 5:19 am Post subject: |
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Here is the misconception of insurance and I don't know how many times I have heard it. I've paid a $1,000.00 per month premium for 20 years and now they are denying my claim and keeping my money. The thing is you are paying premiums for a year and getting coverage for that year. No claim, then the next year you pay your premiums and get another year of coverage. Most people look at insurance as an investment that they are paying into for that 20 years, and are just waiting to cash out. People don't look at an insurance policy as something they purchase every year, and it is most likely because it is not warm and fuzzy. Sure you can hold the wad of paper they send you (and if you do try reading it), but it is not like a new flat screen. It's a gamble. You pay money every year for a piece of mind and hope you never need to use it. If you don't use it, you still purchased something even though you didn't use it. Try not paying and read the posts on this site about not having coverage and an at fault accident happens.
Should 20 plus years get you something…. sure customer service from your agent, but that's about it. The insurance company doesn't care, at least for property insurance. |
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Dasfuk
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| Posted: Sat Mar 08, 2008 1:47 pm Post subject: |
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Would they care if people started dropping them as their agent? Thats an interesting way to look at it and I will certainly think about that.It is correct that you buy this for 6 months or a year,it is not continuous.Most of us tend to think of it that way even though it is wrong.Thanks for bringing that to our attention.
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hummingbird
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| Posted: Sat Mar 08, 2008 2:13 pm Post subject: |
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P&C insurance is one of the only things I know of (well maybe health too) that anyone pays for with the 'hope' they never use it.....try and think of another 'product' that is like that...I can't....also remember all these premiums are not only protecting your property but also there is liablity coverage....could you handle a 100k injury settlement because you left some stuff laying around and a visitor fell and got hurt?
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Lori
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| Posted: Sat Mar 08, 2008 5:40 pm Post subject: |
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I can remember when I was growing up, if that happen you would just apologize and that would be it.Now everyone see dollars signs in everything.Thats the problem anymore people have gotten greedy anymore and are looking at ways to make you pay and people are looking to protect themsleves from those people.Its a sad world today.What is P&C?
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hummingbird
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| Posted: Sat Mar 08, 2008 6:18 pm Post subject: |
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| Quote: | | Its a sad world today |
I agree, greed has really escalated in the past 20-30 years..... (sorry  I hate it when I do that) ''Property and Casualty''
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Lori
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| Posted: Sun Mar 09, 2008 6:51 pm Post subject: |
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| Seeing this industry from the inside from different jobs, it is my understanding that most insurance companies make thier money on auto and commercial policies, and not on homeowner's policies. (Not sure about life, but I would assume they make a killing). Larger commercial policies can have deductibles from 10K with some of them written as self insured up to 1mil. These businesses aren't turning in leaky roof claims that get submitted by homeowners. These policies also have 6 figure plus premiums. So when a homeowner says they will take their 500 to 1000 dollar premium elsewhere if their claim is not paid, do you think the insurance company blinks. |
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Dasfuk
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| Posted: Mon Mar 10, 2008 11:37 am Post subject: |
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you've made some good points Dasfuk | Quote: | | Seeing this industry from the inside from different jobs, it is my understanding that most insurance companies make thier money on auto and commercial policies, and not on homeowner's policies |
However most (if not all) insurance companies actually make their money on investments, we don't pay our premiums, then they just set there in the bank, waiting to pay a claim. this money (premium) is used to invest (of course there is plenty set in 'reserve' to pay claims)
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Lori
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| Posted: Mon Mar 10, 2008 3:56 pm Post subject: |
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Sounds kind of like the banks. They loan out your money.Then they make money on interest. No, the loss of one policy would probably not be noticed, till the company was was bad everyone started taking their business somewhere else.
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hummingbird
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| Posted: Tue Mar 11, 2008 4:07 am Post subject: |
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| Yeah, I forgot about investments. My point was really homeowner's policies. They drop 10's of thousands of policies in FL and don't blink. Investments aside, they may pull in 5 to 7K per year in premiums from these people in FL but will pay out at least double that after a 3% deductible on a hurricane to each policy. The same would go for a simple hail claim in Ohio. They would collect around 500 to 700 per year in premiums but would have to pay out 10K for an average hail claim to someone with a comp roof and aluminum/vinyl siding. |
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Dasfuk
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| Posted: Tue Mar 11, 2008 4:38 pm Post subject: |
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I was thinking after a natural disaster that i heard of some Insurance companies folding. has anyone else heard that? Guess they were not able to stand the huge number of claims,but like you say it is a judgment call.
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hummingbird
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| Posted: Tue Mar 11, 2008 5:28 pm Post subject: |
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Some companies have been required to shut down after major catastrophes such as Hurricane Katrina because the amount of the losses would bankrupt the company. Most companies buy reinsurance to help protect them in these situations.
As for auto insurance, I know in Texas, you can self insure and not have to pay a company a single premium. But, this requires purchasing a bond with the state in the amount of $55,00 currently, going to $75,000 in April. You have to pay for any damages to others property and their injuries. You also have to provide your own legal representation should suit be brought against you.
Self insuring and paying out your own claims can be much more costly than just paying a monthly premium and letting the insurance company handle it.
Always protect yourself also, just because everyone is supposed to carry some sort of insurance, don't assume you don't need PIP, medical payments or uninsured motorist. The mistake most people make is not having enough coverage to protect themselves.
Accidents happen, most of us are fortunate enough to not ever have to use our insurance. But, if the day comes that any insurance company has to pay out hundreds of thousands of dollars on your behalf or to you, you'll be glad insurance exists. |
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MBTexas
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| Posted: Fri Mar 14, 2008 3:03 pm Post subject: |
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Wow! That would be expensive to insure your self.I sure could not afford it.
When you say some companies have been required to shut down ,what does that mean? As does that mean the insurance companies have insures to protect them from going under in case of huge payouts like the hurricanes?
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hummingbird
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| Posted: Fri Mar 14, 2008 6:10 pm Post subject: |
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| Most carriers have Reinsurance carriers to handle larger losses (insurance companies for insurance companies). But carriers are required by every state to maintain sufficient assets to address losses. Audits are done every year to look at the number of polices verses losses. The state can require the carrier take certain actions (write fewer policies, increase assets, stop writing policies, etc) in order to make sure they can pay losses that occur. There are also some last ditch efforts that happen, such as the state taking over the handling of a carriers business. In that case a 3rd party is usually hired to make sure all claims are paid with the carriers assets and the state approves all such payments. Thinks like that are in place to make sure no insurer's loose out (but it can still happen). |
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tcope
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