Insurance is a rip off

[b35w]

Until it’s not

I get the question almost daily so I am going to answer it with a real life scenerio. I literally just got this email 5 minutes ago.

Customer experienced a claim back in May where a tree fell on the back of their house and deck which caused both structural and water damage that needed to be mitigated. Upon the mitigation process, asbestos was found to be present which has to be handed very carefully. The initial check we sent for the roof and initial repairs was for $49,000. Today we issued a second check for $109,000 and will be releasing an additional almost $29,000 once the job is completed. When it is all said and done, my guess is that we will pay out $200,000.

Let’s say this customer has been with us for 10 years and has paid an average premium of $1400/annually which comes out to a total spend of $14,000. If you are this customer, who do you think got the better end of the deal.

Just figured I post up for all the anti-insurance people


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[FOWL MOUTH]

It’s an odds game and the statistics/odds are always in the insurance company’s favor. By the way, that homeowner will probably be canceled when the last check is mailed and premiums will increase for the rest of the customers you insure…that’s how it usually works.

[loud1]

Wow.

[cajunwannabe]

What about the list of customers whose claims have been denied who have paid faithfully for 30 years? Just playing the devils advocate because we all know folks who've been denied as well as plenty who've been canceled after a claim.

[DoubleSprig]

GLWS.
- insurance to an experienced audience is a tough row to hoe.

(but sure is a profitable venture by virtue of every agent Ive ever met)

[b35w]

What about the list of customers whose claims have been denied who have paid faithfully for 30 years? Just playing the devils advocate because we all know folks who've been denied as well as plenty who've been canceled after a claim.

Years and years of insurance being treated like a warranty company. I.E. roof claims. And it’s just as much the insurance companies fault for paying claims that shouldn’t have been paid.


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[porkchop 13]

Business insurance increased just shy of 300.00 a month this year prior to hurricane. I can only imagine the increase that is coming in days ahead after they have had to pay out money to the less fortunate. So a increase on my end and I have never filled a claim.

[b35w]

GLWS.
- insurance to an experienced audience is a tough row to hoe.

(but sure is a profitable venture by virtue of every agent Ive ever met)

I’m not trying to sell you anything. I’m just shedding light on the other side.

I’ve never understood the argument that it is a profitable business.


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[b35w]

Business insurance increased just shy of 300.00 a month this year prior to hurricane. I can only imagine the increase that is coming in days ahead after they have had to pay out money to the less fortunate. So a increase on my end and I have never filled a claim.

Increases suck I get it but statistically speaking there is absolutely no way the numbers work if you only increased the premiums of those who file claims. Use my example above……we could quadruple their premium and never even break even.


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[b35w]

It’s an odds game and the statistics/odds are always in the insurance company’s favor. By the way, that homeowner will probably be canceled when the last check is mailed and premiums will increase for the rest of the customers you insure…that’s how it usually works.

Not necessarily for weather related claims


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[darealdeal]

Question…. If a homeowner does not have flood insurance or “mud slide” insurance they just have the normal homeowner insurance plus like fire….. How are those claims being handled?

[b35w]

Question…. If a homeowner does not have flood insurance or “mud slide� insurance they just have the normal homeowner insurance plus like fire….. How are those claims being handled?

Typical homeowners insurance will not cover any claim that is the result of rising water. My speculation is that it would not be covered as most would be a result of water flow.


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[b35w]

Oh, and I forgot to add……said customer had another tree fall on their shed 2 months later and will have damages exceeding 15k.


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[Smilee]

Insurance is just a game of everyone financing the "misfortunes" of others. With Jake skimming the top for some marketing money.

The companies get too wrapped up in their field inspections some times. They are worried about railings on a porch that has 4 steps or the person with a wood burning stove in a shop that is not on the policy but underwriters claim it could spread and catch the insured house on fire.

But not the 50 trees surrounding the house and leaning across them? That person should be paying higher risk insurance.

[buckbuster]

Just got my homeowners bill from frontline which I switched to last year. Went up over $400. So I’m shopping again.

[b35w]

Insurance is just a game of everyone financing the "misfortunes" of others. With Jake skimming the top for some marketing money.

The companies get too wrapped up in their field inspections some times. They are worried about railings on a porch that has 4 steps or the person with a wood burning stove in a shop that is not on the policy but underwriters claim it could spread and catch the insured house on fire.

But not the 50 trees surrounding the house and leaning across them? That person should be paying higher risk insurance.

I hear the “marketing spend” argument all of the time as well. I assure you that the difference in premium because of marketing spend in almost non existent. Those dollars spread over millions of policies equates to pennies.

Statistically speaking, someone with a wood burning fireplace is much more likely to have a house fire and in regards to railings, you can blame a litigious society for that one. My guess is of the "public" saw the backend of the business some opinions would change.


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[b35w]

Just got my homeowners bill from frontline which I switched to last year. Went up over $400. So I’m shopping again.

I 100% understand why people shops around but this is part of the reason why we see increases. Carrying the risk for 1-2 terms and having a policy holder leave increases risk for insurance company exponentially.

Example: you paid the insurance company $1000 for homeowners last year and then left the following year. Yes, the insurance company “made” $1000 (not really) but we will go with that.

Same scenario but you file a $25,000 roof claim, get it fixed then leave. It’s not sustainable for an insurance company hence one of the reasons increases happen.


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[thawhacker]

Will he be dropped now or how much will his insurance cost go up?

[b35w]

Will he be dropped now or how much will his insurance cost go up?

Not sure. The fact that a second claim was filed for a second loss doesn’t help. Both were the result of weather related claims so not sure.


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[porkchop 13]

One of my customers sent me a message yesterday and asked how my schedule was. One of her windows got broken from storm. Insurance gave them 65.00 for it to be replaced. Not to mention this is a 600.00 window and then to install it.

I mean where is the logic in that