When you’re in an accident, come down ill, or otherwise need financial help to see you through a crisis, you no doubt have an insurance policy in place to protect you. Insurance companies offer a financial shield–for a price. They are not benevolent organizations, but instead are for-profit businesses. That means there may be some things they won’t necessarily mention unless you ask. It’s not that an insurance company is duplicitous; they simply don’t tell you everything. Here are a few things insurers don’t want you to know.
The Real Purpose of the Company
What most people don’t understand is that insurance companies aren’t in business to help you; they are in business to make money. Providing coverage is the service they offer to get you to spend your money with them instead of someone else. If they do a good job, you will most likely continue to do business with them–providing another company doesn’t lure you away with the promise of better service at cheaper rates. There isn’t anything inherently wrong with this; it’s simply the capitalist system in action.
Lawyers Are Their Enemies
As has been previously stated, insurance companies are in business to make money, and they’ll do it at your expense if you let them. If you file a claim, the insurance company will quite often try and find a way to disallow it. The agent may try and say that you somehow breached the contract making it invalid, so the company doesn’t have to pay. If you feel this is in error, and you do deserve the money, hiring a lawyer may make them change their mind. They may back off and begin processing your claim. The downside to this is that you will most likely have to pay the lawyer’s fee.
Negotiation Is the Name of the Game
Filing a claim doesn’t automatically mean you’ll be receiving a check anytime soon. Instead, the company may try and get out of paying the claim. To them it’s simply a negotiation process. Their objective is to pay out as little money as they have to in order to honor a claim, so they may attempt to find a way around it, hoping you’ll settle for less than you’re entitled to.
They Won’t Tell You Everything
As part of the negotiation process, the company may not reveal everything you ought to know. Think of it as a poker game where you and the insurance company both hold your cards close to your vest. The insurer doesn’t want you to see their cards, so they may try to run a bluff. If you’re naive enough to believe everything they say without question, they may coerce you into accepting less than you should get.
Insurance Companies Have Cash Reserves
Although insurance and quotes may claim they don’t have much money, the truth is that most of them have huge cash reserves on hand in case of a true emergency. Because this money draws a tremendous amount of interest, the company is loath to dip into it to pay a claim, so they may try and keep their funds intact as long as possible.
They Don’t Want to Settle Quickly
Because the company has this huge cash reserve that collects interest as long as it remains in their account, their objective is to pay–but not until they have to. In this way the interest continues to accrue. It would go against their best interest to pay a claim quickly, because the more time the money stays in their bank account, the more money the insurance company makes.
You Can Change Companies Anytime You Want
Every once in a while you’ll come across a deal on insurance coverage that beats your present policy, not only in the amount of coverage that is offered, but includes significantly lower premiums. If you approach your agent and say you want to switch agencies, he may try and meet the price you’ve been offered. If they don’t feel it’s in their best interest to meet the price, they’ll probably tell you that you have a binding contract, and can’t break it–at least not without paying a hefty fee. That’s not necessarily true. You will more than likely be able to get out of the policy without paying a fee, but you will probably have to fill out a mountain of paperwork to make it happen.
Guest post from Bailey Harris. Bailey writes about free insurance quotes for InsuranceQuotes.org.