Insurance Inflation

Festofish

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Ahem…go watch “The big short” and tell me we’re a democracy.
Capitalism says you sink or swim…unless you’re “To big to fail”.
Credit is a scam. ROIs on savings accounts are an insult. CDs? Pitiful.
Everybody wants my money to make them money but it’s a one way street.
My credit union is basically a convenience and nothing else.
Insurance is just your money into their accounts.
American greed…we eat our own.
 

Knows3Chords

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We had our rates go up last year, When I called to inquire why, the young lady sounded like she was reading from a script when she explained that it was because they had a higher number of claims in my area in the last year. I kept asking her what did that have to do with me? She did not have a good answer. So we switched.

In the Detroit area, I would guess about a quarter of all cars on the road do not have any insurance at all. My guess is the insurance companies are making you cover the costs these drivers are causing the industry. What a scam.
 

ale.istotle

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We had our rates go up last year, When I called to inquire why, the young lady sounded like she was reading from a script when she explained that it was because they had a higher number of claims in my area in the last year. I kept asking her what did that have to do with me? She did not have a good answer. So we switched.

In the Detroit area, I would guess about a quarter of all cars on the road do not have any insurance at all. My guess is the insurance companies are making you cover the costs these drivers are causing the industry. What a scam.
Absolutely true that your premium covers uninsured and underinsured claims. This is how insurance works. They collect, by design, more in premiums than they expect to pay out. They monitor claims by area, demographic, car type, you name it. The companies that promise you a check fast do that because they want to settle fast for less than they would if you took your time to fully understand and document your loss. They know their exposure in a given segment in excruciating detail and they price to protect themselves.

There are some companies that will price according to credit-rating based on the premise that people who have good credit are less likely to make a claim if they can absorb the loss without raising their insurer's eyebrows. People with lower credit ratings are generally strapped for cash and much more likely to make a claim.
I had been with one insurer for 30 years and stayed because of inertia. Checked prices and got a policy from a solid insurer for 45% of what I had been paying. Shame on me for not checking sooner.
Insurance is not fair and insurance companies are not charities. Check prices regularly.
 

imwjl

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Ahem…go watch “The big short” and tell me we’re a democracy.
Capitalism says you sink or swim…unless you’re “To big to fail”.
Credit is a scam. ROIs on savings accounts are an insult. CDs? Pitiful.
Everybody wants my money to make them money but it’s a one way street.
My credit union is basically a convenience and nothing else.
Insurance is just your money into their accounts.
American greed…we eat our own.
My intent is not flame or let this get out of hand for moderators, but this has crossed my mind as a small business and home owner. It is too bad law allows some but not all to self-insure.

The way we have associations and coops that are legal has me feel some insurance coverage could be done that way. I think of how a neighborhood association could have escrow or a fund that could cover stuff like a fire claim but not likely cover a disaster hitting a neighborhood. Something like we moved our health coverage where basics and front line are handled by the physician and member owned coop, but we go to a different network for specialist coverage.

It has been frustrating to watch my 20 years claim-free basic liability policy for my business. Reasons for it almost always going up are very often matters that could be managed better.

I'm the wrong person for where a lot of frustrations and problems go unless we create a new category of extreme called extreme pragmatists or moderates!

:)
 

imwjl

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Aren’t they bad enough as is?
That will depend on the neighborhood association and local ordinances. In my current municipality local ordinance, building/zoning and clear/treasurer at city hall have a legally binding management say that has stopped inane stuff and childish behavior the few times it popped up where we live not.

My real point on neighborhood associations is they often exist, and there can be a more sagacious municipality like mine. Thus, they could be a mechanism for some level of being self-insured.

Where my thoughts and ideas are likely tilting windmills is how at an overall level financial services has gown so huge and powerful. The crazy realm of so many firms making a slice from the core job of trying to get more basic things done.

We will only improve stuff like this if we rethink our differences. Everyone needs to work at stuff we have in common vs take our sides in more tribal ways or let parochial behavior mess up running things well.
 

ale.istotle

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My intent is not flame or let this get out of hand for moderators, but this has crossed my mind as a small business and home owner. It is too bad law allows some but not all to self-insure.

The way we have associations and coops that are legal has me feel some insurance coverage could be done that way. I think of how a neighborhood association could have escrow or a fund that could cover stuff like a fire claim but not likely cover a disaster hitting a neighborhood. Something like we moved our health coverage where basics and front line are handled by the physician and member owned coop, but we go to a different network for specialist coverage.

It has been frustrating to watch my 20 years claim-free basic liability policy for my business. Reasons for it almost always going up are very often matters that could be managed better.

I'm the wrong person for where a lot of frustrations and problems go unless we create a new category of extreme called extreme pragmatists or moderates!

:)
Insurance companies owned by policy holders are called Mutuals. For the average policy holder they are still just insurance companies.
https://en.wikipedia.org/wiki/Mutual_insurance
 

Mowgli

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The ability to ask yourself very simple questions when presented with information is a demonstration of "critical thinking."

For example:

TV and Radio are routinely plastered with several types of ads; Medicare Advantage (Disadvantage), Pharmaceutical, Life/Home/Vehicle Insurance and Personal Injury Lawyer ads.

IT COSTS A LOT OF $$$ TO ADVERTISE ON TV AND RADIO.

SO... WHERE DO THESE COMPANIES GET ALL OF THIS MONEY FOR THEIR NON-STOP ADVERTISING???


THINK ABOUT IT. THEY GET IF FROM THEIR PAYING CUSTOMERS.

For example:

Many VERY learned experts who have studied these subjects for many years agree that Medicare Advantage (the stuff peddled by Joe Namath, Jimmy Walker, Captain Kirk, etc.) should be called Medicare DIS-Advantage.

<https://www.ralphnaderradiohour.com/p/medicare-advantage-is-a-scam#details>

For example:

I've had conversations with a lot of attorneys over my lifetime. Many graduated from the top law schools (e.g. Yale, Harvard, U Chicago, U Michigan, Duke, Stanford, etc.). When the subject of Personal Injury (PI) attorneys is discussed nearly all of them say, basically, the same thing: "With PI cases, it only takes a few large verdicts or settlements to retire. This is why they advertise so much; it increases their chances of landing that once-in-a-lifetime "Pot of Gold" case."

I can't tell you what to do but, personally, (1) I'd check out Consumer Reports regarding the top Insurance companies and how to evaluate policies, (2) avoid Medicare Advantage (insurance companies preying on Seniors, IMO) like the plague - stick with good 'ole Medicare and buy a Medicare "Supplement" plan to cover the other ~ 20% of costs and (3) try to find a good law firm or two in advance should you ever need a PI attorney.

Off the soapbox.
 

Mjark

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"With PI cases, it only takes a few large verdicts or settlements to retire.
Having worked in casualty claims for a long time this may be the dream but it's not the reality. However BS personal injury claims which is most of them, do drive up your premiums. Increasingly severe weather is too. The people actually handling claims don't want to delay, they want them off their inventory.
Thus, they could be a mechanism for some level of being self-insured.
It's a nice idea but I think you'd find it unworkable.
 

imwjl

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It's a nice idea but I think you'd find it unworkable.
Unworkable by the lobbied and legislated power of the insurance industry. The same firms or similar that administer or help businesses self-insure could do it for other entities with about same levels of money involved. When I was in a firm that did some self-insuring is when I learned it was that and a few others' lobby power that made it possible.

It was not a revolution in savings but when that firm self-insured there were lower costs from the lack of sales profit and from how insurance companies can better get away with being a craptacular bureaucracy.

A few tech giants are getting into health care and some of these areas because their scale, doing business all over the world and their own prowess makes known and illustrates the rotten mess both the providers and insurers are. They do a whole lot of their own paper handling, billing and payments processing to know the inefficient and many poor characteristics of health care and insurance.
 

Mjark

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The same firms or similar that administer or help businesses self-insure could do it for other entities with about same levels of money involved.
They're mostly insurance companies. Some are third party administrators. It's not inexpensive. Self insured clients are the worst to deal with. If you think insurers are bad, self insureds are much worse. Do you think the mortgage companies also on your home owners policy are going to be interested in this idea?
 

wrathfuldeity

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Great conversation! In a basic sense, insurance companies are extortionist leveraging our fear. Which brings up my next point. Which the thing that happened a couple years ago, awakened the salient point. "I am responsible for my own health." And have thus taken to just walking the dog twice a day for an hour, eating better/less (intermittent fasting) and some stretching and usual physical work/exercise around the house (and looking forward to snowboarding more this winter). Relying on health insurance is a false security and giving up my power and sovereignty. Yup I still have health insurance... but I avoid that game like the dark plague.

edit: For the small stuff, get/be in a position of you self-insuring you by having a rainy-day stash. For the big stuff have a catastrophic policy. And if it truely hits the fan, be in position to be poor as possible as fast as possible... because they, the insurance and gov. are slowly or quickly going to get you there anyway. So, you might as well have a plan for them to pay up as soon and as much as possible.
 
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imwjl

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They're mostly insurance companies. Some are third party administrators. It's not inexpensive. Self insured clients are the worst to deal with. If you think insurers are bad, self insureds are much worse. Do you think the mortgage companies also on your home owners policy are going to be interested in this idea?
My intention is not to pick a fight but I have experience from different angles or sides. Business owner, currently a c suite director, a few years of projects and assignments in insurance firms, and close associations with family and friends in other nations to compare the differences.

My associate who does contract and agreement negotiations in an international business has to get the same function accomplished in European nations, US, Canada, a few South American nations and a few nations in Asia. His insights are very interesting. Insurance and transportation are near constant getting same thing done but there are differences in ways. He makes a good argument for how my country could have it much better.
 

Mjark

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I’m not fighting I’m giving you things to consider. Bring it up at your next homeowners association meeting.
 

imwjl

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I’m not fighting I’m giving you things to consider. Bring it up at your next homeowners association meeting.
No one with reasonable intelligence would stir that into action - that the dormant association do anything!

The how we insure matter has come up in the economics news I like to follow. I can't imagine change in my life time but the the short version is some sorts of insuring would be most effective or less costly if status quo changes. I found it really interesting that knowing differences between nations drove some of the big tech and multi-national firms to get into or look at parts of the matter.
 

radtz

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I got a notice from our insurance company a few months ago stating that they moved my car down a to a lower mileage class because it was being driven less. How do they know this?

I called my agent to see what that meant and asked how much my premium would drop. She found that quite amuzing. One thing is for sure, that premium ain't gonna go lower.
 

Mjark

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My homeowners premium got a pretty big bump this year. My insurer had to have taken a hit somewhere.
 

Milspec

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I have always considered litigation against my insurance company regarding a death claim. I have been clinically dead 6 times now, 3 times in the presence of medical staff, and twice for greater than 4 minutes.

Call it a loop-hole, but nothing in my life insurance policy says that I have to remain dead. Legally, as long as a medical doctor declares me dead, my beneficiary should be entitled to my policy pay out. There is no language that prevents me from coming back or that I have to remain dead for 3 days or take a wooden stake to the heart....just be declared dead by a licensed medical doctor.

It would be an interesting case and before anyone declares it as impossible to win, know that I was once sued (and went to court) for violating the civil rights of a self-identified Vampire by forcing him to walk out into daylight. This was back when I worked for the State Prison and the ACLU sent lawyers from NYC to represent the Vampire.

The case did get dismissed when they failed to prove that client sustained any physical injury nor that he was indeed a Vampire. Still, it was a very strange 2 weeks.
 




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