Insurance companies, evil? Is that the newest myth on the internet? With everything going on in the world, the constant changes and challenges we face as a society the answer to that loaded question: yes, no, maybe – depending on who you ask.
What are the reasons that people think insurance companies are evil?
Recently, when you have been going to the grocery store on your weekly run – you have been noticing no matter if you buy the same things as last year, last month or even last week the prices seem to be changing when you get to the checkout. They haven’t been going down, they are only been increasing – due to inflation.
Food, gas, clothing, everything that you buy has most likely had a price increase. That is the same thing that is happening with your insurance. There are a few different factors that go into this.
- Over the last 5-10 years, natural disasters like Superstorm Sandy (2012), the California wildfires (2015-2018), tornado outbreak in the south and east (2011) and Hurricane Harvey (2017), just to name a few have been increasingly worse than we’ve seen before.
- The hard-market beginning back in 2019.
Rates are going up everywhere. In New Jersey we have seen carriers ask for 27-34% increases on their applications. In states like Florida and Louisiana they have seen 63% increases in the homeowner’s market rate.
What are the facts?
Insurance companies usually run a 4% or less profit margin. So, when you see the premium or application increase it is not more money in their pockets. Due to the rise in severity and frequency of natural disasters more often than not the insurance companies are paying out a lot of money. This then causes the reinsurance market to go up, causing the reinsurance for the insurance companies to rise as well.
You, with the help of your professional agent have to know and understand the insurance contract you are purchasing and what you are covered versus not based on that policy/ what is not included in the policy. The contracts can be long – homeowners policies averaging around 42 pages long and business policies sometimes going over 100 pages long. The information they contain is very important: what is included, what is excluded, what has sub-limits or limitations on it for coverage, as well as what has other requirements in order to trigger coverage. This is especially important to know what it comes time to file a claim. If the insurance company rejects your claim it could very well be because the information about the policy was not understood or fully read through; resulting in maybe not having the appropriate coverage for what you need.
At the end of the day…
When a claim gets denied, the insurance companies are “evil”.
When a claim gets paid – paid appropriately and in an appropriate amount of time they are great!
The insurance companies are here in order to help you. To soften the loss when it comes to a home, property damage, a loved one. There to protect the most important things in life: family, life, your home, vehicles, etc. They are banks, profit centers, they are there to make money for their shareholders and boards, in order to support a plethora of employees. It is a multi-trillion dollar industry with tens of thousands of employees across the globe.
So, no they are not evil. If you are having an issue with your insurance, give us a call 877-288-7169, we would love to speak with you and turn your point of view upside down and in the right direction!