Insurance Misconceptions Pt. II – The Industry

Insurance Misconceptions Pt. II – The Industry

In the first part of this misconceptions blog, we discovered the myths behind the insurance agent. Now let’s dive a little deeper into some of those misconceptions that are often heard about the industry itself.

·         The insurance Industry is always raising rates because they’re “greedy.”

The first step in understanding rates is to shine some light on how insurance works. The insurance industry operates under a type of risk management referred to as a risk pool.  In this, risk is allocated among the population with many paying for the losses of the few.

On the contrary, when there are a large amount of losses and the bucket is running dry, it’s necessary to fill that bucket (raise premium rates for all) so that those with future claims can be made whole again.

This trend in rising premium is most notable with auto insurance. Accidents are more prevalent than ever, with many more driving and driving distracted. With the rise in medical and repair cost due to these accidents, rates are higher than ever. Be sure to practice attentive driving and encourage others to do the same.

·         The insurance Industry is there to cause me misery.

With life being chaotic for so many of us, the last thing that should give us grief is our insurance provider. Insurance is there for you to have a piece of mind and confidence that in the event of a loss, you’re covered.

There are many stages in life that insurance helps to guide you through, from repairing your kitchen walls when your aunt caught the turkey on fire, to her health care cost and legal expenses during that terrible accident. Many forget that insurance is there to take some of the misery out of those tough times in life.

·         Insurance companies all offer the same policies.

In the simplest form, insurance carriers offer most of the same coverages. However, not all policies are created equal, and there are providers out there that add on more “bells and whistles” for little to no cost at all. These additions can be a game changer when it comes to losses, and make some wish they had given their policy another glance. It’s always good practice to ask what other endorsements can be added to a policy to cover all gaps.

At the end of the day, the insurance industry is in the business to help make those with losses whole, all the while trying to stay out of the hole. We are here to serve you and put your mind at ease, so never hesitate to pick up the phone (or use our VAST chat service) when you need more answers!

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