4 ms·

Yes, but what would be worse, you recovering only about 15% (and costing your opposition hopefully as much as you lost or more), or you recovering nothing and t

Yes, but what would be worse, you recovering only about 15% (and costing your opposition hopefully as much as you lost or more), or you recovering nothing and the insurance company keeping everything? The problem I've noticed with insurance companies is that they try to run a profit off of the individual person, when really they should be running a profit off of the community as a whole. This is greed vs sustainability. If I charge 100 people $5 for some bogus insurance, if I only pay out $450 for the group, I'm netting $50. However, insurance companies charge 100 people $5 and will up each individuals payments for any claim to try and keep making $500. 100 people getting good insurance at a great cost will stay with a company until they die, they'll also get their friends and family to join up. Suddenly you've got 1,000 people and you're making $500 from loyal customers.

fleitz 16y ago
Read any economics paper on the issues involved in insurance and you'll understand why things are the way they are. Moral hazard abounds on both sides of the transaction, there are many other transactions that each party is a stakeholder to. It sounds like you have an issue with the premium the company charges for taking the risk vs. how they are making their money as the only difference. Do you feel that the guy who leaves his doors unlocked and thus gets broken into a lot should pay the same premiums as you? (I assume you lock your doors / take other precautions) Oh and your loyal customers they left because they saw an ad from progressive / geico about how they could save thousands on their insurance. Or conversely GEICO/Progressive see the rates you are charging and think about how much money they could make if they substituted their service with yours and then make you a "crazy" offer to sell. Also, part of GEICO's rates are the investment genius of Warren Buffet, by making shrewd investments with the premiums they are able to discount the insurance rate by a portion of the interest accrued on the premium.
- ams6110 16y ago
  One of these companies, I think it is GEICO, was able to offer low rates because they only took drivers with spotless accident histories, and they would drop you after one claim. I'm not sure they still operate this way, because they advertise on a lot of mainstream outlets now, and before I remember them being almost a "by invitation only" sort of deal.

fleitz 16y ago

Read any economics paper on the issues involved in insurance and you'll understand why things are the way they are. Moral hazard abounds on both sides of the transaction, there are many other transactions that each party is a stakeholder to. It sounds like you have an issue with the premium the company charges for taking the risk vs. how they are making their money as the only difference. Do you feel that the guy who leaves his doors unlocked and thus gets broken into a lot should pay the same premiums as you? (I assume you lock your doors / take other precautions) Oh and your loyal customers they left because they saw an ad from progressive / geico about how they could save thousands on their insurance. Or conversely GEICO/Progressive see the rates you are charging and think about how much money they could make if they substituted their service with yours and then make you a "crazy" offer to sell. Also, part of GEICO's rates are the investment genius of Warren Buffet, by making shrewd investments with the premiums they are able to discount the insurance rate by a portion of the interest accrued on the premium.

ams6110 16y ago
One of these companies, I think it is GEICO, was able to offer low rates because they only took drivers with spotless accident histories, and they would drop you after one claim. I'm not sure they still operate this way, because they advertise on a lot of mainstream outlets now, and before I remember them being almost a "by invitation only" sort of deal.