The Real Deal About Insurance

Do you really understand what insurance is? The common perception is that insurance is something you are either forced to have or you take to hedge your losses. Therefore most people obtain insurance begrudgingly. They feel like they haven't gotten their monies worth unless their company pays them something back.

Now let me tell you what insurance really is. Insurance is western civilizations answer to socialism or communism. In a socialistic or commune society the responsibility of the welfare of the individual is pooled by the entire society. It works great on paper, until you do the long math. When your income is taxed to pay your share of society’s debt, the government is charged with administering this task and everyone knows governments are inefficient and can never run as well as companies. Governments have bureaucracies, companies trim the fat.

Paying money to an insurance company and pooling it with other policy holders is for your benefit and if you never have to use this benefit you will be better off in the long run. If you put in inflated or fraudulent claims you are just going to cause yourself and everyone else to have a rate increase. That rate increase is going to make someone else feel like they "have to get something for their money" and do the same thing as you. Rates will get higher and higher as we have seen them do in the past. This is called insurance inflation. If people only put in the claims that were necessary, rates would not go up or they would only go up nominally after periods of higher natural disaster, and they go lower after periods of normality. This is because insurance is actuarial rated based on very sophisticated formulas and statistics that take potential losses into consideration way before they ever happen.

An insurance company knows that during times of economic recession, claims start to rise. Everyone thinks they are the first to invent some kind of scheme or idea to make money from their insurance company. The truth is there is an old saying that pre-dates (although is mentioned in) the first biblical books that says "there is nothing new under the sun."

The best way to get money back from an insurance company is by not paying too much in the first place. There are thousand of companies to choose from and that fosters a lot of competition. Competition breeds lower prices, you just have to look for it. Shop your insurances out very thoroughly every year. To make it easier, call on independent agents or brokers that represent you and do business with many different companies. Make sure you are only getting rate quotes from A rated carriers or better and make sure your coverage’s are quoted "apples to apples." Companies that are not complacent to the type of fraud I mentioned earlier are apt to have much better rates than companies that just drop you after your first significant claim. Look for a company with stricter underwriting guidelines. This will put you in with better company and you will pay tens of thousands of dollars less in insurance premiums over the years. Apply this savings towards your debt and live a better lifestyle than the people whom think they are smarter than a multi-billion dollar corporation and are always trying to make a quick buck on the backs of other policy holders.

Listed below are more articles related to the above article from the "Insurance" article category.

People interested in the above article "The Real Deal About Insurance" are also interested in the related articles listed below:

 

How to Obtain Insurance

In our previous articles we've approached such issues as correct cargo insurance, clauses of the insurance agreement, term of validity of the insurance agreement and factors which influence the underwriting rate. Today we'll discuss how to obtain insurance.

Water Damage and Insurance: Flood vs. Homeowners

Water damage is one of the most common reasons that people make claims on their insurance, but do you know exactly what your insurance covers? Both flood and homeowner's insurance deal with water damage, and knowing the difference between them and what's covered by each can help you determine the right coverage for you, as well as help you determine what to do in the event of an emergency.

Understanding Payment Protection Insurance

Ostensibly, such policies cover people if they become sick, made redundant, or are involved in any sort of accident. You can take such policies out alongside all types of borrowing such as store cards, credit cards, personal loans, and mortgages.

Is Getting The Moving Insurance From Relocation Company The Right Choice?

Moving to another country is not an easy task to accomplish and a lot of individuals and families hire international moving companies to handle it for them. Once you sign the contract with them and pay the deposit for your overseas move - you’re done, right? Do your due diligence and check what options the mover offers as to the international moving insurance.

Long-Term Care Insurance: 2009 Study Reveals How Much Coverage People Purchase

National study reveals how much long-term care insurance consumers purchase; at what ages they buy this protection and what they pay. Valuable information for any consumer considering long-term care insurance protection.

What's The Recession Doing To The Insurance Industry?

When you’re sitting at home worrying about the mounting pile of bills to pay, it’s easy to lose sight of the big picture. Fact is, just as you’re in a new world of hurt, there are other people hurting as well. In this case, the people are the inventors in the insurance industry. They all bought shares in these big corporations when the prices were high, never thinking that the world could suddenly turn sour.

Protect Your Belongings With Contents Insurance

If you have been here (earth) long enough then you would have amassed fair deal of detritus, but also valuables. Irrespective of how much certain things could go for on Ebay, they may be of some sentiment which means a worth more than all the money in the world. Even if your home is only partially damaged this could mean a great deal of expense. Using unattainable funds in a scenario whereby you do not have insurance for your home contents.