F...Insurance Companies

And if the cost comes to $7000 dollars are you willing to pay the extra $2000 out of pocket? What we need is tougher laws and enforcement against insurance fraud to bring the cost down.

Saden, you hit it right on the head bro! There needs to be tougher laws out there!

Also I think its important to say that insurance is to protect YOU from catastrophic loss. It is not there for the nickel and dime type losses from a windshield crack. It is there when you are riding along and run a red light and smoke a family of 4. In regards to the deductible, you should always have a large deductible $500+ if you can afford to pay the first $500 of a loss. I have always had a $1k deductible and it lowers your premiums drastically. Now if you can't afford to pay the deductible, by all means don't stretch yourself to do so because sure enough a loss will happen.

Also, as an underwriter (pricing) of risk, motor vehicle records are PROVEN statistical indicators. A driver that has had 1 moving violation in the past 12 months is TEN times more likely to have an accident than a driver with no violations. That is a HUGE statistic. Insurance is a numbers game and with odds like this you can bet the pricing is inflated for tickets and the like.

I work as an state attorney that regulates the insurance industry. For those who bitch about insurance, first understand what it is.

It is based on risk pools and characteristics and math. Statistics cannot say for certain what any one person will do, but they can predict with GREAT accuracy what a well defined group will do if the group is large enough. So - even if you, as a single male, haven't caused any accidents - the statistics show that, historically, for every x number of dollars in premium collected from single males, the insurance company will pay y amount in claims. The key for insurance companies, of course, is to find the point where x>y.

Your past claims affect your future costs b/c, based on acturially justified statistical basis, people who have past claims (even if the past claims cost no money) are likely to COST more in the future (like it or not, it is a statistical truism).

As for padding your claim to cover the deductible - Well, the rate you pay is based on the deductible you claim. You want coverage from dollar 0, well then pay for it. By padding your claim, you only drive EVERYONE's insurance rates higher. Because, by doing so, you render the actuarially justified rate (i.e. people with a deductible of x, make cost us no more than y) inaccurate and the company must reevalute and refile its rates (btw, incurring more costs increasing premiums more).

Do companies fail to pay claims for no good reason? Sometimes, usually its the smaller companies trying to scrape by - they tend to be fast and loose with their contract terms. The larger ones will sometimes screw you over to, usually when you fall into a company's Kafkaesque bureaucracy.

The key is - you are buying a product. The seller of that product is a) trying to make a profit; b) highly regulated; c) relies on statistical evidence to PREDICT what you will cost them in the future.

Please don't misunderstand, I think companies often try to cut corners in the name of good business and sometimes do so to the detriment of their customers (Admit it - "collect money, pay none out" is an exellent business plan if you can get it to work). Generally, though, they rely on their contracts and statistics to try and find the most attractive product for their customers.

In general, understand what you are buying, read your contract, shop around.

I work as an state attorney that regulates the insurance industry. For those who bitch about insurance, first understand what it is.

It is based on risk pools and characteristics and math. Statistics cannot say for certain what any one person will do, but they can predict with GREAT accuracy what a well defined group will do if the group is large enough. So - even if you, as a single male, haven't caused any accidents - the statistics show that, historically, for every x number of dollars in premium collected from single white males, the insurance company will pay y amount in claims. The key for insurance companies, of course, is to find the point where x>y.

Your past claims affect your future costs b/c, based on acturially justified statistical basis, people who have past claims (even if the past claims cost no money) are likely to COST more in the future (like it or not, it is a statistical truism).

As for padding your claim to cover the deductible - Well, the rate you pay is based on the deductible you claim. You want coverage from dollar 0, well then pay for it. By padding your claim, you only drive EVERYONE's insurance rates higher. Because, by doing so, you render the actuarially justified rate (i.e. people with a deductible of x, make cost us no more than y) inaccurate and the company must reevalute and refile its rates (btw, incurring more costs increasing premiums more).

Do companies fail to pay claims for no good reason? Sometimes, usually its the smaller companies trying to scrape by - they tend to be fast and loose with their contract terms. The larger ones will sometimes screw you over to, usually when you fall into a company's Kafkaesque bureaucracy.

The key is - you are buying a product. The seller of that product is a) trying to make a profit; b) highly regulated; c) relies on statistical evidence to PREDICT what you will cost them in the future.

Please don't misunderstand, I think companies often try to cut corners in the name of good business and sometimes do so to the detriment of their customers (Admit it - "collect money, pay none out" is an exellent business plan if you can get it to work). Generally, though, they rely on their contracts and statistics to try and find the most attractive product for their customers.

In general, understand what you are buying, read your contract, shop around.

:goodjob:

Say in my case, I hit some things that flew off the back of a truck and they said that the estimate to have it fixed is $1000 and my deductible is $750. Since I got this car I've paid well over $4000 in insurance to them and I feel EVERY DAMN CENT should be paid on that damage.

And would you feel the same way if you had an accident on Day 2 of the policy that cost the insurance company the max in your liability and property damage limits? Would it be okay for the company to come back and say "Well, Malcolm, we know our contract says we have to pay X, but since you have paid only $150 in premiums, that's all we are going to cover. You're responsible for the other 300,000 in damages."?


No, of course it wouldn't. You entered a contract that is, effectively, gambling on future contingencies. The twist is, the company is betting on you (saying that you will pay more for insurance than you will cost them in the future) and you are really just hedging your bets (by buying this insurance at X, I will protect myself from having to pay out Y). Remember, you will still be liable for what the insurance doesn't cover.

Is it possible you will pay out more than you will ever recover - yup. In fact, for most people it's likely - otherwise the insurance companies couldn't remain solvent. But, are you willing to take the risk that you will be lifelong debtor due to an accident that causes serious injuries (either to yourself or others) b/c you were unable to pay the compensation?

I used to be on the "big bad insurance company" bandwagon too. But after 4+ years of working on the other side, I've never seen any claims get denied without just reason, I've in fact paid claims that probably shouldn't have been paid in the interest of doing good business, and more times than not, any perceived wrong doings have been honest errors and/or oversights, and not due to evil insurance reps who are just out to get the customers.

The first insurance company I worked for had a big feature done on them by 60 Minutes, and they basically did a hack job on it. I lost all respect I had for 60 minutes, they did interviews with disgruntled ex-employees who of course wouldn't reveal their identity, and the claims they "exposed" were grossly overexagerated in the interest of playing into the common myths people have about insurance companies.

...I've in fact paid claims that probably shouldn't have been paid...

So that's why my insurance is so high.

So that's why my insurance is so high.

No, not really.

If everything was looked at with a fine tooth comb and minor claims that were borderline weren't paid, they would only end up in litigation later on which in the end would cost much more than just paying the original claim.

I just don't like the callous disregard insurance companies have for our nation's cavemen. Does Encino Man not bleed when you prick him?

....I'll have the roast duck with the mango salsa

I just don't like the callous disregard insurance companies have for our nation's cavemen. Does Encino Man not bleed when you prick him?

....I'll have the roast duck with the mango salsa
...and I don't have much of an appetite. Thank you.

i need some coverage on my big wheels' dubs.