Insurance Companies: What You Really Need to Know
Insurance is sold as peace of mind. But in today’s world, many are discovering that what they’re buying is increasingly less coverage, higher deductibles, and more uncertainty. So what’s really going on behind the scenes?
Let’s break it down:
What’s the True Purpose of Insurance Companies?
At their core, insurance companies exist to pool and transfer risk—you pay a premium so you’re not financially devastated in case of loss. But make no mistake: they are for-profit enterprises, earning revenue not just from premiums, but from investing that money long before they pay out on any claim.
The Underwriter
This is the person behind the scenes deciding:
- If your property is insurable.
- How much you’ll pay.
- What exclusions and conditions will apply.
They work for the insurer, not for you. Their job is to protect the company’s bottom line, not yours.
The Broker: Friend or Salesperson?
Brokers are supposed to represent you, the policyholder. But many act as conduits for insurance companies, steering clients to preferred providers or packages. Ask:
- How many insurers do they actually quote from?
- Do they earn bonuses for selling specific policies?
- Will they fight for better terms?
You may be surprised.
Premiums: Hard Market vs. Soft Market
We’re in a hard market right now. That means:
- Premiums are up.
- Coverage is limited.
- Risky areas are being dropped altogether.
In a soft market, the opposite is true. But don’t hold your breath—climate volatility, rising rebuild costs, and inflation are keeping things tight.
Can You Actually Insure Against Risk?
You can insure against financial loss, but the risk still exists. What’s changing:
- More exclusions.
- More technicalities to deny claims.
- Greater scrutiny when disaster hits.
And yes, some insurers will do everything possible to find a loophole.
Modern Insurance: A Raw Deal?
Today, policies often come with:
- Sky-high deductibles.
- Lower limits.
- More fine print.
It feels like you’re paying more to get less—and in many cases, that’s exactly what’s happening.
Can You Even Get Coverage?
More and more people can’t. If you live in an area prone to:
- Flooding,
- Wildfires,
- Earthquakes,
you may be told your property is uninsurable. Climate change is redefining risk, and insurers are walking away.
When the Worst Happens: Who’s the Adjuster Working For?
If you make a claim, an insurance adjuster will show up. Just remember—they work for the insurance company, not for you.
For larger claims, consider hiring your own public adjuster. They’ll:
- Fight for your interests.
- Maximize your payout.
- Help interpret your policy.
They take a cut—but often recover much more than you would alone.
Can You Negotiate?
Premiums and deductibles can be negotiated—but only if your broker pushes for it. Some brokers won’t. Why? They may earn more on higher premiums or be more interested in quick sales than strong advocacy.
Know Your Rights and Obligations
You have the right to:
- Clear, honest policy information.
- Challenge decisions.
- Hire your own adjuster or legal counsel.
You’re also obligated to:
- Fully disclose property info.
- Maintain your home.
- Report incidents honestly and promptly.
One misstep? Your claim could be denied—even years into paying your premiums.
Final Thought: Insurance is a Business, Not a Guarantee
Insurance isn’t protection—it’s a financial tool, often wielded by professionals with more experience, more leverage, and better lawyers.
So document everything. Understand your policy. And be prepared to advocate for yourself.