Insurance is a funny thing. There was a time when the population could decide whether they wanted to purchase vehicle insurance. Then, it became a mandate. There was also a time when the population could pick whether or not to purchase healthcare insurance. There are many reasons that you should purchase insurance. Business insurance is great for protecting you from serious financial losses when you own a company. At the same time, you have to keep in mind that insurance providers are not actually in business for their client’s financial welfare. Here are three examples to consider.
Insurance Providers Are Businesses, and They Need Profit
Any lawyer will tell you that insurance companies will do whatever they can to pay you as little as possible and, in turn, retain as much profit as possible. If you have ever been in a minor fender bender and used your insurance to cover the costs of repair, your rates were probably raised thereafter. Even a minor fender bender indicates that you are an increased risk to your insurance provider. In the long run, you end up paying a higher monthly payment that covers the cost you claimed because insurance providers set themselves up to profit. Any business has to earn a profit in order to keep its doors open.
There Are Many Things That Insurance Won’t Cover
You should keep in mind that there are many things that insurance policies will not cover, because that’s one way they make money. This is why before you agree to the insurance provider’s terms, you have to thoroughly read the new policy. Healthcare insurance is one of the most difficult to deal with. It is well-documented that clinical trials, expensive surgeries and treatment for lifelong diseases are difficult to get covered. The patients’ struggle to pay for coverage has given rise to telehealth technology and other on-demand offerings as a way to make medical services more affordable for the average consumer. Homeowner’s insurance is another example that requires a thorough reading because each policy can vary significantly from another in what it covers. If you run into problems, hire legal help.
So, Should You Skip Insurance Altogether?
At the end of the day, you are not encouraged to skip purchasing an insurance policy. There are many cases where it has come in handy. Plus, you can always seek legal counsel if a situation with your insurance provider gets difficult.
As a consumer, insurance policies end up being a double-edged sword. While a policy will protect you from severe financial losses, insurance companies do not always make it easy for you to receive a payout for the claim your policy dictates you should receive.
For more financial advice and assistance, check out our financial literacy webinars!