…If my insurance company makes money?
I hear it often if not every day “Insurance companies are all about making money, they take your premiums and then deny your claims.” The second part of this sentence will be the subject of a future blog. But the first part is what I want to address here.
First of all, this is coming from the perspective of an independent agent. I don’t have any particular insurance company that I’m trying to protect or defend here. My clients are my primary focus, not the “big bad” insurance carriers. For full disclosure, I will say that companies that turn a profit are much easier to work with and provide my agency with better stability.
So to the reply…
#1 – Is there a company or a business model (other than non-profits) that don’t strive to make money? We herald business owners who are able to become successful and in this country we tend to measure success in terms of profitability.
#2 – An insurance company that is making money will have more ability to be there when you need them. It takes money to dispatch claims adjusters, answer phone calls etc. The less money they have the less responsive they can be.
#3 – Since an unprofitable company will go out of business, when they find themselves unprofitable they will be more likely to raise your rates. You get a better premium from a profitable company.
#4 – A profitable company with a good rate for you provides long term stability. Why do you want to spend time shopping your insurance every year and jumping from company to company to save a few dollars? If you can find a good company with good underwriting practices and stable prices, this has to be preferable.
#5 – Profitability has a lot to do with underwriting. If you are a good driver, you want your insurance company to discriminate against bad drivers so that your rate isn’t tied to them.
It’s hard to care about the well-being of a large company, but for better service, better premiums, better long term stability, all other things being equal, pick a profitable company.
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