An Inconvenient Truth

[Hog1]

Originally Posted by FRPLG

Why do there have to be good guys and bad guys? You think there are groups of people sitting around thinking "Hey lets stick it to our customers again!". No they are making money which is their job. Good or bad it is the way it is. Remember: money drives the whole issue both positively and negatively.

Honestly, I believe that with this kind of $$$ involved, and the types of profits being realized by the insurance companies, to surmise there are no bad guys reaping gigantic gains is rather naive. With money "driving the whole issue" you can.............."bank" on there being bad guys

[FRPLG]

Originally Posted by Hog1

Honestly, I believe that with this kind of $$$ involved, and the types of profits being realized by the insurance companies, to surmise there are no bad guys reaping gigantic gains is rather naive. With money "driving the whole issue" you can.............."bank" on there being bad guys

No I don't think it naive. Notice I didn't there are bad guys but rather there aren't groups of these guys meeting on Friday night to play poker and figure out other devious ways to make money. There are bad guys everywhere in all walks of life. I think I just didn't make it clear that as far as insurance companies go they aren't really the bad guys in and of themselves. They exist to make money. Nothing else. Their service is designed to make them money. Making money isn't some nice little offshoot of it.

I come from the mindset that companies are in business to operate efficiently and make money. I think this because it is the ultimate motivation for them to do a good job(not that they do but at least the environment is created so that they can). When they have the motivation taken away them they don't even have the chance to do a good job because why would they?

I don't begrudge any company from making money. As it is, to me, there's no economic system that will satify the wants and needs of everyone without flaws. I think that is the main reason that there isn't a healthcare system in the world that works 100%

As bad as our system seems to work all the state run healthcare systems around world have problems that, while different from ours, are in most cases just as serious.

[JoeRedskin]

Originally Posted by FRPLG

No I don't think it naive. Notice I didn't there are bad guys but rather there aren't groups of these guys meeting on Friday night to play poker and figure out other devious ways to make money. There are bad guys everywhere in all walks of life. I think I just didn't make it clear that as far as insurance companies go they aren't really the bad guys in and of themselves. They exist to make money. Nothing else. Their service is designed to make them money. Making money isn't some nice little offshoot of it.

I come from the mindset that companies are in business to operate efficiently and make money. I think this because it is the ultimate motivation for them to do a good job(not that they do but at least the environment is created so that they can). When they have the motivation taken away them they don't even have the chance to do a good job because why would they?

I don't begrudge any company from making money. As it is, to me, there's no economic system that will satify the wants and needs of everyone without flaws. I think that is the main reason that there isn't a healthcare system in the world that works 100%

As bad as our system seems to work all the state run healthcare systems around world have problems that, while different from ours, are in most cases just as serious.

I work in the insurance regulation business and, I gotta tell ya, your right - I don't think the insurance co.'s sit around in rooms say "ah ha - we can screw those consumers (our customers) this way and that. But, I would say that insurance co.'s are VERY aware that the best business plan is to take in as much money as possible and pay out as little as possible and have considerably more resources than consumers to ensure that they can take advantage of "the system".

[MTK]

Originally Posted by JoeRedskin

I work in the insurance regulation business and, I gotta tell ya, your right - I don't think the insurance co.'s sit around in rooms say "ah ha - we can screw those consumers (our customers) this way and that. But, I would say that insurance co.'s are VERY aware that the best business plan is to take in as much money as possible and pay out as little as possible and have considerably more resources than consumers to ensure that they can take advantage of "the system".

Personally I don't see it that way. I've been in the insurance industry for 5+ years now and as I see things, insurance companies pay when they are obligated to do so and a claim is deemed compensable. Yes they are careful and diligent when examining and adjusting claims to ensure they are paying what is due within the policy terms and limits, but that's just good business and it's not some sort of exclusive practice limited to insurance companies.

[JoeRedskin]

Originally Posted by Mattyk72

Personally I don't see it that way. I've been in the insurance industry for 5+ years now and as I see things, insurance companies pay when they are obligated to do so and a claim is deemed compensable. Yes they are careful and diligent when examining and adjusting claims to ensure they are paying what is due within the policy terms and limits, but that's just good business and it's not some sort of exclusive practice limited to insurance companies.

I actually agree that at the claims level, on an individual basis, yes this is pretty much true. Providing prompt service is part of being a profitable business.

With that said, however, insurance companies pay huge amounts to lobbyists who target laws beneficial to consumers that may end up costing the companies more. Likewise, when there is an ambiguity in the law, count on the company not to do what's "right" but what is cost effect from a policy (not insurance policy but policy as general practice) standpoint. The concern being that consumers do not necessarily have the economic clout to challenge the underlying legislative/policy issues and may not even have the basic knowledge that alternative applications/issues exist.

Don't get me wrong. I am not slamming companies (though there are some that truly deserved to be slammed - just like there are some consumers who game the system). Instead, I am simply pointing out that consumers and insurance companies have opposite profit motives (consumers want more for less and companies want to provide less for more) and that insurers are better equipped to marshall their considerable resources in order to protect and promote their profit motive.

[MTK]

Originally Posted by JoeRedskin

I actually agree that at the claims level, on an individual basis, yes this is pretty much true. Providing prompt service is part of being a profitable business.

With that said, however, insurance companies pay huge amounts to lobbyists who target laws beneficial to consumers that may end up costing the companies more. Likewise, when there is an ambiguity in the law, count on the company not to do what's "right" but what is cost effect from a policy (not insurance policy but policy as general practice) standpoint. The concern being that consumers do not necessarily have the economic clout to challenge the underlying legislative/policy issues and may not even have the basic knowledge that alternative applications/issues exist.

Don't get me wrong. I am not slamming companies (though there are some that truly deserved to be slammed - just like there are some consumers who game the system). Instead, I am simply pointing out that consumers and insurance companies have opposite profit motives (consumers want more for less and companies want to provide less for more) and that insurers are better equipped to marshall their considerable resources in order to protect and promote their profit motive.

I agree, thanks for the clarification. I was just too focused on your comment about them taking advantage of the system, but what you're saying here I agree with.

[Hog1]

Originally Posted by FRPLG

No I don't think it naive. Notice I didn't there are bad guys but rather there aren't groups of these guys meeting on Friday night to play poker and figure out other devious ways to make money. There are bad guys everywhere in all walks of life. I think I just didn't make it clear that as far as insurance companies go they aren't really the bad guys in and of themselves. They exist to make money. Nothing else. Their service is designed to make them money. Making money isn't some nice little offshoot of it.

I come from the mindset that companies are in business to operate efficiently and make money. I think this because it is the ultimate motivation for them to do a good job(not that they do but at least the environment is created so that they can). When they have the motivation taken away them they don't even have the chance to do a good job because why would they?

I don't begrudge any company from making money. As it is, to me, there's no economic system that will satify the wants and needs of everyone without flaws. I think that is the main reason that there isn't a healthcare system in the world that works 100%

As bad as our system seems to work all the state run healthcare systems around world have problems that, while different from ours, are in most cases just as serious.

I just had lunch with my commercial insurance guy (who has done very well with it). He corrected me as I accused him, and the spawn like him of racketeering, profiteering, and wearing an earring. His contention is that the insurance co's are getting what they need to stay in the game.
Live to fight another day Matty.
Closer to the heart, he tells (which I know is true, as I am dealing with it) the insurance co's are pulling out of Florida because of the loss's and liability related to wind/flood damage. He is accustomed to ins co's beating down his door courting him to offer their product. Taking him on trips, long golf weekends, Dolphin tickets, etc. He says, that is GONE. Never hears from anyone like that. His opinion is the atty's are reaping the fruit of the land. Far be it from me to me to protect the atty's.
THEY are the BAD guy's

[firstdown]

Originally Posted by Hog1

I just had lunch with my commercial insurance guy (who has done very well with it). He corrected me as I accused him, and the spawn like him of racketeering, profiteering, and wearing an earring. His contention is that the insurance co's are getting what they need to stay in the game.
Live to fight another day Matty.
Closer to the heart, he tells (which I know is true, as I am dealing with it) the insurance co's are pulling out of Florida because of the loss's and liability related to wind/flood damage. He is accustomed to ins co's beating down his door courting him to offer their product. Taking him on trips, long golf weekends, Dolphin tickets, etc. He says, that is GONE. Never hears from anyone like that. His opinion is the atty's are reaping the fruit of the land. Far be it from me to me to protect the atty's.
THEY are the BAD guy's

I've been in the business for over 20 yrs. and I have never had an ins. co. courting me to sell their products. I did have one take me to lunch but these trips and football tickets you talk of I have never seen this. I have seen the agencies courting the ins. co. to let them sell their products. The problem in Fl. is not the atty's its the premium v/s the risk that ins. co. are getting away from. A large Ins. Co. has to write at a good profitt for 15 to 20 years just to break even from one hurricane. They cannot charge enough premium to make up for the risk in FL and on top of that they are expecting an increase in hurricans in the years to come.

[Hog1]

Originally Posted by firstdown

I've been in the business for over 20 yrs. and I have never had an ins. co. courting me to sell their products. I did have one take me to lunch but these trips and football tickets you talk of I have never seen this. I have seen the agencies courting the ins. co. to let them sell their products. The problem in Fl. is not the atty's its the premium v/s the risk that ins. co. are getting away from. A large Ins. Co. has to write at a good profitt for 15 to 20 years just to break even from one hurricane. They cannot charge enough premium to make up for the risk in FL and on top of that they are expecting an increase in hurricans in the years to come.

The remaining companies are making a good run at it. State farm jacked my homeowners by 300%. I'm told that is a good deal in this market. A good deal has a different meaning in my mind. As Matty pointed out, some of this may be driven by fraudulent claims. I understand that............but I am innocent. Why am I paying for it? My original point is this, the health ins system is a BAD system. It works for those collecting the loot. Who's at fault? I don't know

[firstdown]

Originally Posted by Hog1

The remaining companies are making a good run at it. State farm jacked my homeowners by 300%. I'm told that is a good deal in this market. A good deal has a different meaning in my mind. As Matty pointed out, some of this may be driven by fraudulent claims. I understand that............but I am innocent. Why am I paying for it? My original point is this, the health ins system is a BAD system. It works for those collecting the loot. Who's at fault? I don't know

I'd say in FL. fraudulent claims is a small part of the problem its the exposure that is the problem. With what your paying now for Homeowners Ins. the Co. are still and will be in a negative in that area for years and years to come and thats only if FL can go without any more hurricans. Its not that your guilty or innocent you are just paying for the exposure that FL faces. If you owned an insurance co. how much would you charge for a $200,000 dollar home? If its a total loss the Ins Co. could stand to lose Dwelling Cov $200,000, contents 140,000, additional living expenses 12months maybe 4,650 per month X12= 55,800 for a total of $395,800. That does not enclude the cost to house employess etc.. to handle the claims.

[JoeRedskin]

Originally Posted by Hog1

The remaining companies are making a good run at it. State farm jacked my homeowners by 300%. I'm told that is a good deal in this market. A good deal has a different meaning in my mind. As Matty pointed out, some of this may be driven by fraudulent claims. I understand that............but I am innocent. Why am I paying for it? My original point is this, the health ins system is a BAD system. It works for those collecting the loot. Who's at fault? I don't know

<sigh> We get this one all the time. "Why are my rates going up, I've never made a claim."

Insurance 101 - You are part of a pool of insureds - that is the ONLY way anyone can afford to be insured, by pooling risk. Maybe you haven't made any claims, but people in your risk pool did and, in order to afford covering everyone in the risk pool, premiums have to increase to reflect the increased risk presented by the pool of insured.

[MTK]

Originally Posted by JoeRedskin

<sigh> We get this one all the time. "Why are my rates going up, I've never made a claim."

Insurance 101 - You are part of a pool of insureds - that is the ONLY way anyone can afford to be insured, by pooling risk. Maybe you haven't made any claims, but people in your risk pool did and, in order to afford covering everyone in the risk pool, premiums have to increase to reflect the increased risk presented by the pool of insured.

I prefer the "We raised your rate because we hate you" explanation.