What do you think about this statement?

[sactoking]

Originally posted by: Chiropteran

Originally posted by: BigJ
Are you going to have $100,000+ in cash when you hydroplane into a telephone pole and need to go to the hospital?

Standard maximum coverage for most insurance policies is $25k or $50k, so your silly example would hurt someone with insurance just as much if not more than someone who saved up money.

Of course, insurance is required by law in most places, so for that reason alone it makes sense.

Originally posted by: Turin39789
I've definetly seen single hospital stays that have cost more than $1 million. Don't imagine he will be saving that up anytime soon.

I seriously doubt you or anyone in this thread has insurance coverage that high. Check your policy, it probably maxes out at $50k.

Actually, that's the standard minimum for most auto policies. At a company like State Farm or Progressive, you may be able to get $15,000 coverage depending on your state, but most companies start at $25,000 and go up to $300,000 before you get into the "affluent" market. An umbrella policy is relatively cheap and those coverages usually start at $1,000,000.

Most lines of insurance run around a 75% loss ratio. When only making a 25% profit on premiums it takes that 3 years to build up enough of a reserve to start making a profit.

What isn't mentioned here is that this is just the loss ratio. A better measure would be to use the combined ratio, which adds the expenses into the losses. Most P&C companies run a combined ratio close to or above 100%. So, with your claims plus administrative costs, they typically lose money on a policy. Insurance companies aren't profitable on policies (from a combined perspective) for a long time, if ever. They make their money by investing the unearned premiums you've deposited with them.

 

[sactoking]

Originally posted by: Chiropteran

Originally posted by: rgwalt
You could never hope to save enough money to protect yourself 100% of the time. One major car accident could wipe you out. A kid tripping on your porch on Halloween could wipe you out.... Think of the car accident where you severly maim or kill someone (purely accident). Now imagine if that person were a doctor or lawyer with a wife and 3 kids... The family would come after you for every single penny you had to give. Insurance is there to help protect you against this kind of scenario. As you have more wealth to protect, you need more insurance. Now, the probability of this happening is very low, but think of being wiped out financially... Can you afford to let this happen by not carrying insurance?

Health insurance is another one... it gets more expensive and harder to obtain as you get older (when you actually need it most). I rarely use my health coverage because I don't need it, but I want it to be there if something serious happens. What if something happened and I needed a new kidney? I couldn't possibly come up with the money to make that happen. Even if I could save that kind of money, it would totally wipe me out financially. What if it were cancer and required costly, on-going treatment? Eventually I would be bled dry of cash. At that point I would need to start robbing banks to stay alive... Not a good scenario.

Insurance is a wise investment considering the potential "return" on the money invested in the premium.

Most of your silly examples would not be covered by insurance either, so I don't really get your point.

Ummm.... unless he's intentionally causing those accidents or tripping that kid, he'd be covered.

 

[BigJ]

Originally posted by: Chiropteran

Originally posted by: BigJ
Are you going to have $100,000+ in cash when you hydroplane into a telephone pole and need to go to the hospital?

Standard maximum coverage for most insurance policies is $25k or $50k, so your silly example would hurt someone with insurance just as much if not more than someone who saved up money.

Of course, insurance is required by law in most places, so for that reason alone it makes sense.

And what's so silly in my example besides the fact that you're too cheap to get adequate insurance in the case of an accident?

It doesn't cost that much more to go up to $100,000 coverage.

And even if it only goes up to $25,000 or $50,000, the person with insurance is still considerably better off. In the case of $25,000 they only have to absorb the cost of $75,000 + whatever insurance payments they've made. In the case of $50,000, they only have to absorb the cost of $50,000 + whatever payments they've made. I'd call that much better than having to absorb $100,000.

 

[DisgruntledVirus]

Originally posted by: sactoking

Originally posted by: Chiropteran

Originally posted by: rgwalt
You could never hope to save enough money to protect yourself 100% of the time. One major car accident could wipe you out. A kid tripping on your porch on Halloween could wipe you out.... Think of the car accident where you severly maim or kill someone (purely accident). Now imagine if that person were a doctor or lawyer with a wife and 3 kids... The family would come after you for every single penny you had to give. Insurance is there to help protect you against this kind of scenario. As you have more wealth to protect, you need more insurance. Now, the probability of this happening is very low, but think of being wiped out financially... Can you afford to let this happen by not carrying insurance?

Health insurance is another one... it gets more expensive and harder to obtain as you get older (when you actually need it most). I rarely use my health coverage because I don't need it, but I want it to be there if something serious happens. What if something happened and I needed a new kidney? I couldn't possibly come up with the money to make that happen. Even if I could save that kind of money, it would totally wipe me out financially. What if it were cancer and required costly, on-going treatment? Eventually I would be bled dry of cash. At that point I would need to start robbing banks to stay alive... Not a good scenario.

Insurance is a wise investment considering the potential "return" on the money invested in the premium.

Most of your silly examples would not be covered by insurance either, so I don't really get your point.

Ummm.... unless he's intentionally causing those accidents or tripping that kid, he'd be covered.

Thus not an accident 😉

 

[DisgruntledVirus]

I always love anti-insurance company threads. They give me warm tinglies all over.

 

[Special K]

You should only use insurance to cover against catastrophic losses. If the cost of the "insurance" is comparable to what the covered item is worth, then obviously it makes little sense to insure that item.

 

[Gibson486]

Ummm...I went to the emergancy room for a foot injury. I had no insurance....it cost me $3k just for the visit alonr. That did not include the actual doctor, the xrays....

that is enough to break people's bank. Then again...this is atot. We all make millions and have lots stored away in Apple stock as well as an offshore account.

 

[SMOGZINN]

Originally posted by: DisgruntledVirus

Originally posted by: SMOGZINN
While there are some really good and informed reasons why insurance is good posted here, I'll give you what I see as the final say on this. Insurance companies make money because for the majority of people insurance is a losing bet.

I will argue that point.

Okay, lets.

Odds are 1 in 4 (per google searching) that you will be in an accident in your lifetime.

That means that 3 in 4 never have an accident in their lifetime.

..Edited out a lot of stats that sound scary, but really mean you are very unlikely to need insurance....
Factor in the number of losses that don't result in either and it's easy 15% or higher for autos.

So that means that 85% of people don't need insurance.

Insurance companies make money because they invest it, not from premium coming in.

They surely invest as well, but their primary cash cow is premiums, that is where they got all those huge amounts to invest.

The fact is with auto, home, and health insurance you WILL make a claim against one of them in your life time (and odds are 2 of them).

But have paid in many times more then you claim against, with the exception of that 15% who really needs insurance, and then the company makes every effort not to pay. Don't get me wrong, they need to do due diligence to be sure that the claim is legitimate, but they as a rule go too far with the big claims that is the reason people get insurance at all.

Find me one person who can go through life (and isn't rich/wealthy in the very top percent of earnings for working americans) without making a claim against insurance if they have it. You won't be able to, be it from the 25% chance of an auto accident in your life, claim on your home, or claim on medical coverage.

So far I've never claimed on insurace, and I'm more then half way over in my life.

What about life insurance? Everybody that has a life insurance policy gets something out of it (well their loved ones do).

That is only true for those that actually die while having a life insurance policy, I would bet that most do not. It seems most commonly people get a life insurance policy for a few years then let it drop (or cash it in for a huge loss) when things get a little tight.

 

[Chiropteran]

Originally posted by: BigJ
And what's so silly in my example besides the fact that you're too cheap to get adequate insurance in the case of an accident?

It doesn't cost that much more to go up to $100,000 coverage.

And even if it only goes up to $25,000 or $50,000, the person with insurance is still considerably better off. In the case of $25,000 they only have to absorb the cost of $75,000 + whatever insurance payments they've made. In the case of $50,000, they only have to absorb the cost of $50,000 + whatever payments they've made. I'd call that much better than having to absorb $100,000.

What is silly is your arbitrarily picked $100,000 number. If you are just going to pick numbers, then I can pick a number double your insurance maximum, whatever it is 😛

Sure, it would be nice to be protected against any and all potential accidents, but the thing you must realize is that insurance companies are a for-profit business. They are not a charity and the majority of people spend a lot more premiums than they ever cost the insurance company. The majority of people really would be better off without insurance. Sure, there are those 1% cases like your example where someone gets into a horrible accident and owes hundreds of thousands of dollars, but those cases suck even if you have insurance- you are going to be in debt, probably have to declare bankruptcy, and it's going to mess your life up- with or without insurance. So why even argue about those examples?

Originally posted by: sactoking

Ummm.... unless he's intentionally causing those accidents or tripping that kid, he'd be covered.

No, really he isn't. You kill some kid and get sued for a million, your insurance max isn't going to be high enough to cover it. A new kidney? You can't buy those, I hope it was a joke. Cancer requiring ongoing treatment? After the first treatment your insurance premiums are going to be sky-high, you are going to end up paying for it either way.

 

[DisgruntledVirus]

SMOGZINN you say you have never made a claim against a policy. So you have paid 100% of the costs of any auto accident, Dr visit, and damage to your home? Man you must be making billions, have 3 supermodel gf's sleep in your bed with you every night, and crash Lambo's for fun or are the 1 person on this planet who never has and never will need insurance. I'm glad you haven't needed it yet, but when you do need it I'm sure you'll be glad you have it.

Insurance is peace of mind knowing that if something happens you can replace it (except in extreme examples like deaths/serious illness/etc) or get it fixed.

 

[Turin39789]

Originally posted by: Chiropteran

Originally posted by: BigJ
Are you going to have $100,000+ in cash when you hydroplane into a telephone pole and need to go to the hospital?

Standard maximum coverage for most insurance policies is $25k or $50k, so your silly example would hurt someone with insurance just as much if not more than someone who saved up money.

Of course, insurance is required by law in most places, so for that reason alone it makes sense.

Originally posted by: Turin39789
I've definetly seen single hospital stays that have cost more than $1 million. Don't imagine he will be saving that up anytime soon.

I seriously doubt you or anyone in this thread has insurance coverage that high. Check your policy, it probably maxes out at $50k.

I was referring to health insurance, my industry, the OP did not specify insurance type. Your health insurance should cover that claim.

 

[sactoking]

Originally posted by: Chiropteran

Originally posted by: sactoking

Ummm.... unless he's intentionally causing those accidents or tripping that kid, he'd be covered.

No, really he isn't. You kill some kid and get sued for a million, your insurance max isn't going to be high enough to cover it. A new kidney? You can't buy those, I hope it was a joke. Cancer requiring ongoing treatment? After the first treatment your insurance premiums are going to be sky-high, you are going to end up paying for it either way.

[Inigo Montoya]

I do not think that word means what you think it means.

[/Inigo Montoya]

'Coverage' in insurance means "will your insurance pay what they are obligated to", NOT "will pay 100% of the cost".

All three accidents would be covered.

As for the health insurance, it really depends on if you have group or individual coverage. A new kidney should be covered under almost any policy. Cancer may or may not be covered, but you can always get something like an AFLAC cancer policy (though I don't recommend them). Health rates, especially group rates, are not nearly as volatile as auto/P&C rates, so even if you need $20,000,000 of surgery, your rates shouldn't rise.

 

[IGBT]

..it's a necessary evil. ins.co. are experts at statistics,acturials,and risk assesment. If they sell you insurance it's because they're betting your a low risk. And your betting that chite happens and it may be your turn.

 

[Leros]

If you had tons of money (as in extremely rich) insurance is probably stupid since you pay more in the long run with insurance (unless something really really bad happens).

 

[Uppsala9496]

Originally posted by: Chiropteran

Originally posted by: BigJ
Are you going to have $100,000+ in cash when you hydroplane into a telephone pole and need to go to the hospital?

Standard maximum coverage for most insurance policies is $25k or $50k, so your silly example would hurt someone with insurance just as much if not more than someone who saved up money.

Of course, insurance is required by law in most places, so for that reason alone it makes sense.

Originally posted by: Turin39789
I've definetly seen single hospital stays that have cost more than $1 million. Don't imagine he will be saving that up anytime soon.

I seriously doubt you or anyone in this thread has insurance coverage that high. Check your policy, it probably maxes out at $50k.

Most group health insurance plans have a $1M or $2M lifetime max.

I'll use my mom as an example (since I know her). She has a $2M lifetime limit on her health insurance.
Every 3 weeks she has a $12,000 treatment. That is just the cost of the drug. Tack on the costs of the technicians, etc and her vists push every bit of $15,000. Every 3 weeks!
Then she has CAT scans that take place about once a month, MRI at regular intervals (forget if that is every 6 weeks or so...), along with other tests/scans that I don't recall offhand.

Anyways, point is her $2M lifetime max could be hit. Life/health/disability insurance is not something you self insure. The costs are too high.
If you need a detailed explanation of pooling and the methodology behind insurance, let me know. My work load is a little light today so I can detail how insurance works for you.
I worked as an underwriter for group health for 3.5 years. I've been underwriting D&O/EPL/fiduciary for the past 7.

 

[MikeyIs4Dcats]

the value in insurance is having it, not in needing it.

 

[Turin39789]

Originally posted by: Uppsala9496

Originally posted by: Chiropteran

Originally posted by: BigJ
Are you going to have $100,000+ in cash when you hydroplane into a telephone pole and need to go to the hospital?

Standard maximum coverage for most insurance policies is $25k or $50k, so your silly example would hurt someone with insurance just as much if not more than someone who saved up money.

Of course, insurance is required by law in most places, so for that reason alone it makes sense.

Originally posted by: Turin39789
I've definetly seen single hospital stays that have cost more than $1 million. Don't imagine he will be saving that up anytime soon.

I seriously doubt you or anyone in this thread has insurance coverage that high. Check your policy, it probably maxes out at $50k.

Most group health insurance plans have a $1M or $2M lifetime max.

I'll use my mom as an example (since I know her). She has a $2M lifetime limit on her health insurance.
Every 3 weeks she has a $12,000 treatment. That is just the cost of the drug. Tack on the costs of the technicians, etc and her vists push every bit of $15,000. Every 3 weeks!
Then she has CAT scans that take place about once a month, MRI at regular intervals (forget if that is every 6 weeks or so...), along with other tests/scans that I don't recall offhand.

Anyways, point is her $2M lifetime max could be hit. Life/health/disability insurance is not something you self insure. The costs are too high.
If you need a detailed explanation of pooling and the methodology behind insurance, let me know. My work load is a little light today so I can detail how insurance works for you.
I worked as an underwriter for group health for 3.5 years. I've been underwriting D&O/EPL/fiduciary for the past 7.

Some policies my have a rider to increase the lifetime max or remove it for more moneys, this was an option at my former employer but I imagine it is rare.

My current policies lifetime max is 5mil, but thats a bonus of working for an insurance co.

 

[SMOGZINN]

Originally posted by: DisgruntledVirus
SMOGZINN you say you have never made a claim against a policy. So you have paid 100% of the costs of any auto accident, Dr visit, and damage to your home? Man you must be making billions, have 3 supermodel gf's sleep in your bed with you every night, and crash Lambo's for fun or are the 1 person on this planet who never has and never will need insurance. I'm glad you haven't needed it yet, but when you do need it I'm sure you'll be glad you have it.

Nope, never needed insurance. I'm one of the 75% that has never been in a car accident, does or pays for my own home repairs, pays for his own medical (I have never even had medical insurance.)

Insurance is peace of mind knowing that if something happens you can replace it (except in extreme examples like deaths/serious illness/etc) or get it fixed.

In other words, we don't really need it, but the insurance companies bombard us with scary information so that we think we do.
"How much is peace of mind worth to you?"
Well, if you are even slightly good at math, not much.
Your stats speak for themselves. Only 15% or people actually need insurance.

 

[MikeyIs4Dcats]

Originally posted by: SMOGZINN

Originally posted by: DisgruntledVirus
SMOGZINN you say you have never made a claim against a policy. So you have paid 100% of the costs of any auto accident, Dr visit, and damage to your home? Man you must be making billions, have 3 supermodel gf's sleep in your bed with you every night, and crash Lambo's for fun or are the 1 person on this planet who never has and never will need insurance. I'm glad you haven't needed it yet, but when you do need it I'm sure you'll be glad you have it.

Nope, never needed insurance. I'm one of the 75% that has never been in a car accident, does or pays for my own home repairs, pays for his own medical (I have never even had medical insurance.)

Insurance is peace of mind knowing that if something happens you can replace it (except in extreme examples like deaths/serious illness/etc) or get it fixed.

In other words, we don't really need it, but the insurance companies bombard us with scary information so that we think we do.
"How much is peace of mind worth to you?"
Well, if you are even slightly good at math, not much.
Your stats speak for themselves. Only 15% or people actually need insurance.

and what would happen if you were diagnosed with a major ailment tomorrow?

 

[kranky]

It doesn't matter if statisticallly only 15% (or pick a number) actually use insurance.

It's managing risk. If for a few hundred dollars a year, you can protect yourself against being financially ruined if you are in a serious car accident, then it makes sense to do that. Same for health insurance.

The whole "you're betting you will/they're betting you won't" statement is a misnomer. You're not rolling the dice at a craps table, you're evaluating the risk/reward ratio and deciding that a small cost is worth paying in order to not be devastated if you're one of the unlucky ones. You're sharing the risk with other people.

If I was young and single and owned very little, then maybe I'd skip life insurance. But I find it financially irresponsible to not be insured against some kid running through my yard uninvited, and tripping over a garden hose and doing a face plant into the brick patio. Or running down a stupid pedestrian who tried to run across the street in front of my car but falls down halfway across.

I don't even care what they make. I see people all the time here refuse to buy a product or service if they think the seller is making "too much" on the deal, even if it makes sense for the buyer to purchase it. If I think the risk/reward ratio is not favorable, I can choose not to buy, but I don't make purchase decisions based on how much the seller might or might not be making.

 

[DisgruntledVirus]

Originally posted by: SMOGZINN

Originally posted by: DisgruntledVirus
SMOGZINN you say you have never made a claim against a policy. So you have paid 100% of the costs of any auto accident, Dr visit, and damage to your home? Man you must be making billions, have 3 supermodel gf's sleep in your bed with you every night, and crash Lambo's for fun or are the 1 person on this planet who never has and never will need insurance. I'm glad you haven't needed it yet, but when you do need it I'm sure you'll be glad you have it.

Nope, never needed insurance. I'm one of the 75% that has never been in a car accident, does or pays for my own home repairs, pays for his own medical (I have never even had medical insurance.)

Insurance is peace of mind knowing that if something happens you can replace it (except in extreme examples like deaths/serious illness/etc) or get it fixed.

In other words, we don't really need it, but the insurance companies bombard us with scary information so that we think we do.
"How much is peace of mind worth to you?"
Well, if you are even slightly good at math, not much.
Your stats speak for themselves. Only 15% or people actually need insurance.

I love getting quoted out of context. I said 15% of the US population (that drives) gets in an accident each year. Oh and I was also taking 300 mil as the population, which is higher then the number of licensed drivers in the US. That means that % is most likely low. I don't have time to go look up the numbers, but if you want to look them up feel free to and prove me wrong.

As Mikey said, if you had a heart attack tomorrow how would you pay for it?

Kranky you are correct. It is about managing the risk in case something happens that would otherwise ruin you financially for years (and the rest of your life in turn).

 

[Uppsala9496]

Originally posted by: SMOGZINN

Originally posted by: DisgruntledVirus
SMOGZINN you say you have never made a claim against a policy. So you have paid 100% of the costs of any auto accident, Dr visit, and damage to your home? Man you must be making billions, have 3 supermodel gf's sleep in your bed with you every night, and crash Lambo's for fun or are the 1 person on this planet who never has and never will need insurance. I'm glad you haven't needed it yet, but when you do need it I'm sure you'll be glad you have it.

Nope, never needed insurance. I'm one of the 75% that has never been in a car accident, does or pays for my own home repairs, pays for his own medical (I have never even had medical insurance.)

Insurance is peace of mind knowing that if something happens you can replace it (except in extreme examples like deaths/serious illness/etc) or get it fixed.

In other words, we don't really need it, but the insurance companies bombard us with scary information so that we think we do.
"How much is peace of mind worth to you?"
Well, if you are even slightly good at math, not much.
Your stats speak for themselves. Only 15% or people actually need insurance.

Wow. Talk about uninformed.
Here are some stats for you.
The Columbus Dispatch reports that Ohio had $1.2 billion in insurance claims for the third quarter of the year, trailing only hurricane-hit Texas and Louisiana.
That's up from $62 million in claims during the same period last year.

Mind you that is the whole state, but 1.2 billion in claims in just 3 months is a lot of money over a short period of time. A large portion of that is property claims.

Hopefully you are young and never suffer an accident of any sort. No health insurance is just stupid. Yea, you may not have any issues now, but you will. That is a fact. Just like eventually dying is a fact. I don't underwrite health anymore so I can't pull accurate statistics for you.

Why do so many people/companies purchase so many different lines of insurance if it is not needed?
It can't be advertising. I can probably list at least 10 lines of coverage you have never heard of, yet they exist. Why? Oh wait, I know. Because they are needed!

 

[SphinxnihpS]

Regarding insurance of any sort (because it's all really the same thing), I think you should believe whatever you read on ATOT. I think there are a lot of people here who know a lot about insurance.

THEY DO NOT HAVE A BIG ENOUGH ROLLSEYES EMOTICON FOR THE ABOVE SARCASM.

 

[SphinxnihpS]

OMG I just read what SMOGZINN wrote in this thread. LOL WOW!

I thought we had eugenic failsafes to protect against situations like this?

 

[SphinxnihpS]

LOLOLOLOLOL WOW, some of you are agents for insurance carriers? Get your E&O policies out, you're gonna need them soon I predict.