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In your own words, explain insurance deductibles.

pstall

By pstall,
in Huddle Lounge

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Happy Panther Grand Master

Happy Panther

Posted
Posted

Insurance companies are the only legal racket I know of that can take your money for years and the first time you use the service you've been paying for they can refuse to settle up and terminate your arrangement.

I fugging hate them. Criminals one and all.

They can non-renew your contract whenever they want (subject to state law) as you can terminate coverage whenever you please.

As far as refusing to settle up, are you talking about losses covered by a policy that they just refuse to pay?

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Happy Panther Grand Master

Happy Panther

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Posted

Yes.

How many people got the whole "I'm sorry but your policy doesn't cover wind damage" BS after Katrina? Back during the class action lawsuit against Masonite I had scores of neighbors told that their claims for repairs to their homes were denied because the damage was rot and that wasn't covered when the issue was faulty materials. (I live in a community of about 1000 homes that were all sided with Masonite by the builder) Or how about the guy that works for me who was denied further coverage after an acute issues was diagnosed and cured. Paid for it all out of pocket because of deductibles. Or how many people do we all know who have had a car insurance company refuse a claim? I can count half a dozen that I'm related to.

And as for the whole "You can cancel too" BS...

I give it 2 days before your mortgage company calls you if you cancel your home owners with the message of get more of face foreclosure. The sheriff will take a few more days to come take your plate if you cancel your car insurance but DOT will have a letter in your box by the end of the week. Yeah health insurance you can cancel when you want. I guess that's fair enough to cover the other two.

I'm intimate with how pricing and underwriting work, not claims (except from the numbers side)

I'll address your second points first.

Driving is a privilege granted by the state and as part of that privilege you agree to maintain certain minimum. (And not drink and drive, and get your car inspected, etc..) Driving is not an inalienable right. This has nothing to do with the insurance company, it is your government and it is the right thing. And secondly, in many states (not sure about NC) you can go without insurance as long as your prove you have a certain amount of money in the bank.

Homeowners is no different. I can't blame the mortgage company, why would they put themselves on the hook for $X00k without protection. You don't want the mortgage company involved then pay cash.

In any case bare minimum coverage isn't that expensive is it?

Most insurance claim disputes relate to complicated contractual issues. As to your first example I think the issue wasn't wind damage but flood damage which no insurance policy covers. The issues came about in determining whether the damage was actually wind or flood (Did the water damage come from rising flood waters, or from rain for the hole in the rood or from wind pushing the water?). I guess I would question the logic of living below sea level and not having flood insurance first, but i know most of the victims were dirt poor to begin with. Unfortunately in instances like this you have a company with shareholders vs claimants and it is simply not clear whether coverage applies or not.

Of course many people say they just should have paid the claims out of fairness and all the money they make. But we already discussed the fact that insurance companies are so heavily regulated and aren't making money as it is, you expect the million shareholders to approve spending billions of dollars in claims for stuff that may not be covered?

I don't like this part of insurance any more than you do. I mean the fact that sometimes claims have to go to court.

But all of the claims disputes that I have ever seen have been contractual.

The other anecdotal examples you give, in my experience, boil down to people expecting coverage for stuff that simply isn't covered. Most states are ready to nail insurance companies to the wall if the unfairly deny a claim. I seriously doubt your buddies were victims of claims abuse, but I can't say.

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Happy Panther Grand Master

Happy Panther

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I stand corrected on the Katrina thing. I had them backward and you were correct. Below sea level though? I think most of southern Miss and Ala would like to show you how far above sea level their towns and houses were. Same thing happened after Andrew in So. Fla.

As I said, Ive got family in the insurance business so I know the futility of trying to argue with anyone in it.

We will have to agree to disagree...

I don't really disagree. If your house is 3 feet full of water is it flood or wind? Hell if I know...

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Happy Panther Grand Master

Happy Panther

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Like I said I am not a claims guy; when someones says the point point of a deductible is "a way for insurance companies to deter you from using what you are paying for and cutting into their profits" I can pretty confidently argue that this is not the case. I don't really have an argument against claims practices except for my limited claims experience*

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