Insurance Anyone?

[psionl0]

Originally Posted by lionking

This is not my experience at all. Provided you have evidence of loss and damage and the claim meets the conditions of the policy, you will get paid.

Heh it depends on the insurance company.

When a backyard fence blew down on a boundary between my home and my neighbours, my local insurance company settled my half of the cost over the phone (and paid extra upon being given a bona fide quote for the repair). However, the other owner had a devil of a time with his insurance company who really played hard ball. They tried to claim that the storms at the time weren't big enough to knock down a fence then they even claimed that they inspected the fence and found "no significant damage" (a total lie). I believe that the owner eventually had to pay his share of the damage out of his own pocket.

[novaphile]

You've missed the best part.

Someone fakes an injury on your property, and sues you for $10m...

Your insurance company says: "Don't give it another moment's thought."

Four years later, they let you know that the case is over and the person is in jail for fraud.

If that doesn't convince you to have insurance, I guess nothing will.

[Dr. Keith]

I have basic insurance. Probably adding an umbrella this year as TM mentioned above.

In the past I’ve gone without malpractice insurance. At the time my major asset was my house which is protected in my state. In case of a claim all of my cash would have been deposited with my defense attorney as a retainer. Having no assets really takes the wind out of most malpractice claims. I let each client know prior to engaging me.

Today I couldn’t pull that. So, I work for someone who pays for my malpractice coverage. It is one reason I will likely not quit.

[psionl0]

Originally Posted by Dr. Keith

I have basic insurance. Probably adding an umbrella this year as TM mentioned above.

In the past I’ve gone without malpractice insurance. At the time my major asset was my house which is protected in my state. In case of a claim all of my cash would have been deposited with my defense attorney as a retainer. Having no assets really takes the wind out of most malpractice claims. I let each client know prior to engaging me.

Today I couldn’t pull that. So, I work for someone who pays for my malpractice coverage. It is one reason I will likely not quit.

It sounds like you operated your business as a sole trader - something that financial advisors recommend you don't do (not all states would quarantine your house like this).

Ideally, you should run your business via an LLC or S-Corp. "Limited Liability" is then not in question.

[psionl0]

Originally Posted by novaphile

You've missed the best part.

Someone fakes an injury on your property, and sues you for $10m...

Your insurance company says: "Don't give it another moment's thought."

Four years later, they let you know that the case is over and the person is in jail for fraud.

If that doesn't convince you to have insurance, I guess nothing will.

Lol that makes me think of protection rackets:

Local Racketeer: "Don't worry about paying those bikies. We -er- persuaded them to leave you alone from now on".

[TragicMonkey]

Originally Posted by Roger Ramjets

Unless it doesn't.

Insurance companies don't just sit on the premiums you pay them, they invest it - often in risky markets. Then they calculate that only a small proportion of it will have to be payed out in claims. In this way they are like banks, except that they never have to worry about being subject to a 'bank run' - but they can be wiped out by an unusually large amount of claims.

So what do they do about it? Why the obvious thing of course - buy insurance to cover the risk!

Reinsurance is a thing. It's a critical foundation underlying most of the insurance industry but it's something those outside the industry rarely know about or understand. (The other thing in insurance people rarely understand is subrogation, and much heartburn would be avoided if they did.)

[theprestige]

Originally Posted by Thor 2

Another thing the un-insured avoids is the frustration of fighting with insurance companies, to get the money they paid good money for.

Originally Posted by lionking

This is not my experience at all. Provided you have evidence of loss and damage and the claim meets the conditions of the policy, you will get paid.

Successful insurance companies know how to set premiums. They know that they will collect more fees over time than they will pay out. They will not waste money fighting valid claims.

Yeah, I've never had problems with insurance claims.

After our first cat became extremely expensive to care for in her final years, we went ahead and got pet insurance on our second cat. Now she's developed a couple conditions that are treatable but expensive to treat. And the insurance company has paid every single claim so far without demur. After several years of paying premiums for a healthy cat, in the past two years the policy has already paid for itself. And this cat has maybe another ten years of life left. We'll be dipping from that well quite a bit more, I think.

Our third cat, we went ahead and started the policy right away. It'll probably (hopefully!) be many more years before he needs it, but we anticipate getting our money's worth along with our peace of mind.

As others have pointed out, though, health insurance is a weird one.

[Thor 2]

Originally Posted by theprestige

Yeah, I've never had problems with insurance claims.

After our first cat became extremely expensive to care for in her final years, we went ahead and got pet insurance on our second cat. Now she's developed a couple conditions that are treatable but expensive to treat. And the insurance company has paid every single claim so far without demur. After several years of paying premiums for a healthy cat, in the past two years the policy has already paid for itself. And this cat has maybe another ten years of life left. We'll be dipping from that well quite a bit more, I think.

Our third cat, we went ahead and started the policy right away. It'll probably (hopefully!) be many more years before he needs it, but we anticipate getting our money's worth along with our peace of mind.

As others have pointed out, though, health insurance is a weird one.

I would suggest that your case is exceptional or the insurance company would go broke.

[lionking]

Originally Posted by Thor 2

I would suggest that your case is exceptional or the insurance company would go broke.

That’s not how insurance works. All insurance companies know some policies will cost them more than they get back in premiums. This happened to me as well. Unprofitable policies do not make companies go broke. They employ the smartest actuaries and analysts going around and know that some policies will cost them, but most won’t.

[theprestige]

Originally Posted by Thor 2

I would suggest that your case is exceptional or the insurance company would go broke.

I would suggest that you have no idea what you're talking about.

But yes, please: Feel free to imagine that I somehow found a complete idiot who set up a whole business to lose money, and I happened to be on the winning end of your imaginary stupidity.

[Francesca R]

Well actually, insurance that is profitable for the insured does have to be exceptional, or the insurer will go under. So that's correct.

[lionking]

Originally Posted by Francesca R

Well actually, insurance that profitable for the insured does have to be exceptional, or the insurer will go under. So that's correct.

How many of the insured have to end up in front for the insurer goes under? There are two examples provided in this thread. So, yes, exceptional, but not unknown nor unexpected.

[Thor 2]

Originally Posted by theprestige

I would suggest that you have no idea what you're talking about.

But yes, please: Feel free to imagine that I somehow found a complete idiot who set up a whole business to lose money, and I happened to be on the winning end of your imaginary stupidity.

Originally Posted by Francesca R

Well actually, insurance that is profitable for the insured does have to be exceptional, or the insurer will go under. So that's correct.

It would seem that both you and I, Francesca, fit the "imaginary stupidity" theprestige so rudely mentions.

If he would show us the maths of how an insurance company can pay out more than they collect, it would be more impressive than the above rant.

[theprestige]

Originally Posted by lionking

How many of the insured have to end up in front for the insurer goes under? There are two examples provided in this thread. So, yes, exceptional, but not unknown nor unexpected.

It's basically prepaid healthcare for cats. Presumably they found the break-even point on likelihood of expensive cat conditions, number of subscribers, and acceptable price point for that number of subscribers. So, not exceptional, just actuarially sound.

[theprestige]

Originally Posted by Thor 2

It would seem that both you and I, Francesca, fit the "imaginary stupidity" theprestige so rudely mentions.

If he would show us the maths of how an insurance company can pay out more than they collect, it would be more impressive than the above rant.

They're not paying out more than they collect. That doesn't mean that when they do pay out a claim it's exceptional.

They collect from people who quite reasonably want the peace of mind and assured recovery that their monthly or yearly subscription buys them. They pay out to people who actually end up needing that assured recovery. Statistical outcomes are not unusual or unexpected. They're anticipated and accounted for.

[lionking]

Originally Posted by Thor 2

It would seem that both you and I, Francesca, fit the "imaginary stupidity" theprestige so rudely mentions.

If he would show us the maths of how an insurance company can pay out more than they collect, it would be more impressive than the above rant.

Who the **** has said that? This comment of yours is a lie. All that has been said is that some policy holders can end up in front.

[Thor 2]

Originally Posted by lionking

Who the **** has said that? This comment of yours is a lie. All that has been said is that some policy holders can end up in front.

Ok so maybe I shouldn't have used the word exceptional. What I am trying to get across, is that if the insurance company has a high number of payouts exceeding what they get in, they will go broke. The income from premiums should be quite high to cover wages paid and other overheads and still make a profit.

Don't see why we have all this angst with talk of stupidity and lies.

[theprestige]

Originally Posted by lionking

Who the **** has said that? This comment of yours is a lie. All that has been said is that some policy holders can end up in front.

And that even policyholders who never file a claim still benefit from the service.

[TragicMonkey]

Originally Posted by Thor 2

Ok so maybe I shouldn't have used the word exceptional. What I am trying to get across, is that if the insurance company has a high number of payouts exceeding what they get in, they will go broke. The income from premiums should be quite high to cover wages paid and other overheads and still make a profit.

It's true that an insurer must take in more than it pays out in order to remain in operation, but like casinos insurance is not operating with a field of equal probabilities. The things that can be insured against are all less likely to occur than not to occur, that's what makes insurance possible (and profitable). The larger the pool you're drawing from the more total payouts you'll make, sure, but also the even larger number of customers who will not be getting payouts. If the probabilities work out nicely enough you can even charge very low prices and give very large payouts -- to the very few people who need them.

This doesn't quite work with health insurance, though, as I mentioned above, because the probability of needing medical care is a near certainty so the odds are not in the insurers' favor; and because they can't stay afloat against unfavorable odds they have to overcome that by charging excessive prices and denying payouts when they shouldn't. Health insurance can't play the odds fairly the way property insurance can because cancer and high blood pressure are far more likely than fire and flood. Health insurers have to put their fingers on the scales to ensure profitability, they can't play the odds honestly.

[Dr. Keith]

Originally Posted by psionl0

It sounds like you operated your business as a sole trader - something that financial advisors recommend you don't do (not all states would quarantine your house like this).

Ideally, you should run your business via an LLC or S-Corp. "Limited Liability" is then not in question.

Lawyers don’t recommend it either. The thing is an LLC doesn’t protect you from liabilities you create through your own actions, it really just protects you from liabilities created by your employees. If I misfile something I’m liable no mater the structure of my firm. If my employee misfiled something then the client could sue the firm and the employee. The later is just not usually worth the effort. But, I had no employees.

Now I have multiple LLCs that I don’t really do much with, but that is a different issue. Still no employees.

And the homestead exemption in our state is notoriously generous. I remember hearing tales of a businessman who built a penthouse in his office building so he could declare the whole building as his homestead. Not sure how that would fly today.

[lionking]

Originally Posted by Thor 2

Ok so maybe I shouldn't have used the word exceptional. What I am trying to get across, is that if the insurance company has a high number of payouts exceeding what they get in, they will go broke. The income from premiums should be quite high to cover wages paid and other overheads and still make a profit.

Don't see why we have all this angst with talk of stupidity and lies.

And that's what happens in the real world.

[Francesca R]

Originally Posted by lionking

All that has been said is that some policy holders can end up in front.

Yes. Exceptions. And you agreed.

[The Don]

Originally Posted by theprestige

It's basically prepaid healthcare for cats. Presumably they found the break-even point on likelihood of expensive cat conditions, number of subscribers, and acceptable price point for that number of subscribers. So, not exceptional, just actuarially sound.

And it's hardly magic, if our experience is anything to go by.

As they got older, the annual costs of insurance for our cats rose until we felt that they were prohibitive. We self-insure for our cats now.

OTOH we have lots of other kinds of insurance and we would hope to be net losers as far as premiums goes because that means not too much bad has happened.

[Armitage72]

Originally Posted by lionking

This is not my experience at all. Provided you have evidence of loss and damage and the claim meets the conditions of the policy, you will get paid.

My roof has suffered wind damage twice in the last 10 years. The first time, the adjuster came to my house, reviewed the damage, wrote an assessment, and handed me a check on the spot. The second time, this March, he (same guy) decided that the entire roof should be replaced, so I had to wait a week or so for them to mail me the check.

[bluesjnr]

Originally Posted by Armitage72

My roof has suffered wind damage twice in the last 10 years. The first time, the adjuster came to my house, reviewed the damage, wrote an assessment, and handed me a check on the spot. The second time, this March, he (same guy) decided that the entire roof should be replaced, so I had to wait a week or so for them to mail me the check.

I find that a strange way for an insurance company to put matters right by simply providing you with a cheque. Do they inspect the finished work? What if your choice of roofer influenced the write off of the roof because of his shoddy work?

In the UK insurance companies will have a list of traders and they will quote direct to the insurers for the work and be instructed directly by them.

It's like when I damage my car, I don't get a cheque, I get instructed to take it to XXXX garage for repair. No money passes hands.

[theprestige]

I think a lot of it depends on the insurer and the nature of the coverage. The two times I made insurance claims on my car, they directed me to a repair shop in my area whose quality they approved of and who worked directly with them for payment. I just gave the front desk my keys and my claim paperwork. They called the insurer, made all the arrangements, and took care of everything. My final bill was just the amount of the annual deductible on the policy. But I figure the automobile insurance and repair ecosystem is probably much better established in most markets, than the roof repair and insurance ecosystem.

[psionl0]

Originally Posted by bluesjnr

I find that a strange way for an insurance company to put matters right by simply providing you with a cheque. Do they inspect the finished work? What if your choice of roofer influenced the write off of the roof because of his shoddy work?

In the UK insurance companies will have a list of traders and they will quote direct to the insurers for the work and be instructed directly by them.

It's like when I damage my car, I don't get a cheque, I get instructed to take it to XXXX garage for repair. No money passes hands.

It depends on the insurance company. Mine will pay me directly on receipt of a bona fide quote (they may even make a payment before receiving the quote).

[lionking]

Originally Posted by psionl0

It depends on the insurance company. Mine will pay me directly on receipt of a bona fide quote (they may even make a payment before receiving the quote).

I remember the “good old days” when you could get an inflated quote, got the car fixed by a moonlighter or a mate and ended up well in front. Days long gone of course.

[psionl0]

Originally Posted by lionking

I remember the “good old days” when you could get an inflated quote, got the car fixed by a moonlighter or a mate and ended up well in front. Days long gone of course.

I don't know how my insurance company would act if I made a claim for my car (never had to) but I have an "agreed value" policy.

I remember claiming against the other guy's insurance in the "good old days". This guy's company played hard ball all the way but was forced to pay out after I produced witnesses (but still made me run the gauntlet of assessors). Since he had the same insurance company that I did at the time, it is no surprise that I changed insurance companies after that.

[Puppycow]

Originally Posted by Thor 2

Personally I don't like insurance in principal and think it just has to be overpriced. I mean if some company is prepared to sell you cover for a risk, then the cover just has to be overpriced, or the company will trade at a loss.

There seems to be a common attitude among many, that to be insured for all manner of things is mandatory, and it is even immoral to be uninsured.

So, two things here to consider. On your latter point, I think it's important to consider what kinds of insurance you might need, and what kinds you can do without.

On the former point, all for-profit companies will make a profit margin on the goods or services they provide. When you buy food at the grocery store, the store makes a profit. Does that mean that the food is overpriced? Would it be easier to grow your own food? I work in a job where I can make more money per hour doing something else, and so I find it to be a very good deal for me to allow others to produce the food I consume, and pay whatever the market price is for that food. It would take me more time to grow my own food and prepare it. I can actually save time and effort by concentrating on just doing one job, getting paid for it, and using the money I earn to buy the things I need.

Not having insurance is a gamble. Odds are it will pay off, at least in the short term, to not have insurance, but if you are unfortunate, the results could be devastating.

[Puppycow]

In the US, apparently, the cost of health care may vary depending on whether you are insured or not. The health insurance companies negotiate prices with health care providers.

So, e.g., the same procedure might cost three times more if you don't have insurance than if you do. When you have a health emergency, you don't really have time to go comparison shopping for the best deal.

In Japan, it's different. Everyone here has health insurance (it's mandatory) and the prices are controlled by the government. Don't believe the myth that the "free market" will always organically provide the most cost-efficient solution.

[Lothian]

Originally Posted by lionking

I remember the “good old days” when you could get an inflated quote, got the car fixed by a moonlighter or a mate and ended up well in front. Days long gone of course.

The good old days when fraudsters actions led to higher premiums for the rest of us to pay their inflated claims. That in turn led to the employment of loss adjusters and claims checkers adding a whole level of extra cost pushing up the premium price.

We now know who to blame.

[lionking]

Originally Posted by Lothian

The good old days when fraudsters actions led to higher premiums for the rest of us to pay their inflated claims. That in turn led to the employment of loss adjusters and claims checkers adding a whole level of extra cost pushing up the premium price.

We now know who to blame.

Yeah I know. Mea culpa. I think we all did shameful things when younger. Maybe not you……

[Thor 2]

Originally Posted by Puppycow

So, two things here to consider. On your latter point, I think it's important to consider what kinds of insurance you might need, and what kinds you can do without.

On the former point, all for-profit companies will make a profit margin on the goods or services they provide. When you buy food at the grocery store, the store makes a profit. Does that mean that the food is overpriced? Would it be easier to grow your own food? I work in a job where I can make more money per hour doing something else, and so I find it to be a very good deal for me to allow others to produce the food I consume, and pay whatever the market price is for that food. It would take me more time to grow my own food and prepare it. I can actually save time and effort by concentrating on just doing one job, getting paid for it, and using the money I earn to buy the things I need.

Not having insurance is a gamble. Odds are it will pay off, at least in the short term, to not have insurance, but if you are unfortunate, the results could be devastating.

No that is not what I am saying.

I am suggesting that insurance is overpriced and expensive when looked at from the point of view of the insured. Comparing what he gets when insured to what the financial outcome is if not.

I am suggesting that the insured should look at what has been his expenditure on all his policies (Health, car, travel, pet, house, house contents, and whatever else paid for.) and compare it with what has been received as benefits from claims, over the same period of time. If more insured parties pool their results the resulting picture would be more comprehensive.

I do not insure whenever I can avoid it and my lack of payouts for things I could have insured for testifies that I benefit financially. It would seem that few here share my view and value "peace of mind" more highly that I do.

[Puppycow]

Originally Posted by Thor 2

I am suggesting that the insured should look at what has been his expenditure on all his policies (Health, car, travel, pet, house, house contents, and whatever else paid for.) and compare it with what has been received as benefits from claims, over the same period of time. If more insured parties pool their results the resulting picture would be more comprehensive.

I do not insure whenever I can avoid it and my lack of payouts for things I could have insured for testifies that I benefit financially. It would seem that few here share my view and value "peace of mind" more highly that I do.

So much of this depends on each person's life situation.

Do you have children or dependents? I have life insurance because I do. If I didn't, I wouldn't bother to pay for life insurance.

Health insurance is, I think, one that you are best advised to have, in most situations. In some cases, it is the law. You must legally have liability insurance in certain cases, such as if you own a car, or most businesses.

I cannot say whether I would make the same decision as you without knowing more about your particular lifestyle. It makes a big difference whether you are single or have a family. It matters how old you are, and what kind of risks you take. I worry less for myself than I do for my wife and children, because I don't want to leave them destitute if I should die suddenly in an accident.

[TragicMonkey]

Originally Posted by Thor 2

No that is not what I am saying.

I am suggesting that insurance is overpriced and expensive when looked at from the point of view of the insured. Comparing what he gets when insured to what the financial outcome is if not.

I am suggesting that the insured should look at what has been his expenditure on all his policies (Health, car, travel, pet, house, house contents, and whatever else paid for.) and compare it with what has been received as benefits from claims, over the same period of time. If more insured parties pool their results the resulting picture would be more comprehensive.

I do not insure whenever I can avoid it and my lack of payouts for things I could have insured for testifies that I benefit financially. It would seem that few here share my view and value "peace of mind" more highly that I do.

It's a gamble. Your odds of having your house destroyed by fire are pretty low, but if it happens and you're not insured you may be financially ruined. The point of insurance is to pool risk so you can pay fractions of what you'd spend if catastrophe occurs. You are paying to shield yourself from risk. If you never "get your money back" that's a good thing because it means disaster didn't strike you.

Self-insurance is only viable if you are either very rich or have prophetic knowledge of the future. If you are a Time Lord and know for a fact that nobody's going to slip on your icy walkway and break their tailbone and successfully sue you for hundreds of thousands, then by all means, skip insurance. Otherwise you are gambling.

[Puppycow]

Originally Posted by TragicMonkey

If you never "get your money back" that's a good thing because it means disaster didn't strike you.

Yes, this exactly. I hope to not have my insurance pay off. It's just there to cushion the blow, but with any insurance, you hope to not need it.

[lionking]

Originally Posted by Puppycow

Yes, this exactly. I hope to not have my insurance pay off. It's just there to cushion the blow, but with any insurance, you hope to not need it.

So correct that I don’t get why some do not see this fact.