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Why do we have to pay a deductible/co-pay?

Skyye

Skyye

Senior member
As I drove to work on Thursday morning, a kamikaze doe decided to ram the side of my car. It smashed in my front side passenger window, destroyed the rear view mirror, bent the hell out of the antenna, and not sure how but cracked the windshield. It also scratched both passenger doors, trunk door, and spoiler. What a mess! I have glass and hair all through my car. Well I had a claims adjuster look at my car and he figured that it would cost about $2500.00 for repairs. I have a $200.00 deductible. So, I will get $2300.00 for repairs.

I guess my question is, if I pay for coverage, why do we the consumer have to pay a deductible?? Also why do we have to pay a co-pay for doctor visits and prescriptions??
 
Deductibles and co-pays simply help to keep the monthly cost of insurance lower.

You probably had a lower deductible option...but it would have increased your monthly premiums by quite a bit.
 
Cuda1447 said:
You're what.... 17? No way you're an adult and don't understand how insurance works.
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I doubt most adults know how it works. "$20 a day for insurance?! That's outrageous!" Even though we pay 100% if they smash the car since it's zero deductible. Has happened. Had to blacklist some company last month after they destroyed three vehicles. I hate my job, except for the punishing people part.
 
No deductible and people file a claim every time they get a parking-lot door ding.
No co-pay and they hit the doctor's office for a stubbed toe.
 
Cuda1447 said:
You're what.... 17? No way you're an adult and don't understand how insurance works.
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Hey I am just sitting here watching the Vikings game, kinda bored thought I would make a post of something random.. Accident is on my mind so I figure why not. No need to be a douche. ...But thanks for stopping by.
 
It's a revenue stream and the additional money that they take in is taken into account in how much your insurance costs each month. If you chose to do a no copay/deductible policy they would increase your rates to make up for that lost money.
 
Its not just to reduce claims for minor incidents. Its also to reduce the problem of moral hazard. The idea is that if people pay nothing in the case of an accident, they will drive like assholes since they are insulated from the consequences of their actions.
 
Skyye said:
As I drove to work on Thursday morning, a kamikaze doe decided to ram the side of my car. It smashed in my front side passenger window, destroyed the rear view mirror, bent the hell out of the antenna, and not sure how but cracked the windshield. It also scratched both passenger doors, trunk door, and spoiler. What a mess! I have glass and hair all through my car. Well I had a claims adjuster look at my car and he figured that it would cost about $2500.00 for repairs. I have a $200.00 deductible. So, I will get $2300.00 for repairs.

I guess my question is, if I pay for coverage, why do we the consumer have to pay a deductible?? Also why do we have to pay a co-pay for doctor visits and prescriptions??
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Are you serious?

Because that is what you agreed to when you purchased the policy. You can decrease the deductible.
 
pcgeek11 said:
Are you serious?

Because that is what you agreed to when you purchased the policy. You can decrease the deductible.
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I've always had a $1,000 deductible. It lowers the rates, and that's about my cash threshold. I just want protection from catastrophic loss. Otherwise, they just raise your rates anyway, and get back the money they paid out.
 
Short answer = to make insurance companies a lot of money.
 
Last edited:
Insurance is an idiotic industry perpetuated by idiotic, ignorant consumers.

In my opinion insurance should protect you from catastrophic events and nothing more. It should cover the things that a reasonable, intelligent being would be unable to prepare for.

Insurance for little things with co-pays is the dumbest thing in the world.
 
bhanson said:
Insurance is an idiotic industry perpetuated by idiotic, ignorant consumers.

In my opinion insurance should protect you from catastrophic events and nothing more. It should cover the things that a reasonable, intelligent being would be unable to prepare for.

Insurance for little things with co-pays is the dumbest thing in the world.
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That's how a lot of insurance people envision it but a lot of ignant/lazy people think of it as something much more comprehensive . . . and those insurance commericals isn't helping one bit, either.
 
bhanson said:
Insurance is an idiotic industry perpetuated by idiotic, ignorant consumers.

In my opinion insurance should protect you from catastrophic events and nothing more. It should cover the things that a reasonable, intelligent being would be unable to prepare for.

Insurance for little things with co-pays is the dumbest thing in the world.
Click to expand...

That's it - although it's not strictly true to say that it is 'idiotic'.

The times insurance is most appropriate are when it is protecting you from an event that you could not afford to occur, and which would be very unlikely to occur. For example:
1. Protecting property that you could not afford to replace - e.g. fire insurance on your house
2. Protecting 3rd parties from your mistake, where you may not be able to pay their costs - e.g. medical costs, if you hit someone with your car.

It is rarely appropriate to insure against an event that you can afford to pay for, or which happens relatively frequently - e.g. dropping your iPhone. Insurers have overheads when administering these policies, and have to make a profit - so generally, it is far more expensive to insure against a risk, than it is to take the risk on yourself. Of course, insurers love these sort of policies, because they are rich sources of profit. In business, there may be times when it is appropriate to insure for this type of risk - e.g. for predictability of cash flows, etc. but this is very much the exception.
 
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