Wednesday, November 14, 2012

Insurance Is Boring....Until You Need It

Being Happy About Losing

Okay, I'm going to share the real truth about insurance.  Let me rephrase.  I am going to share the real truth about insurance as I see it.  Others may disagree and I will gladly yawn.  Insurance is gambling.  Yep, gambling.  However in this case, you don't want to be the 'winner'.  Every day, millions of  individuals apply for insurance, pay their premium, renew a policy and generally undergo the glamour free administrative side that the majority of people, the majority of the time see as their sole interaction with an insurance company.  It's a line item on the family budget, a black hole that the see Euros, Dollars, Pounds, Pesos and a host of other currencies swallowed and thought never to be seen again by the person signing the check or using the credit card.   The insurer is the "house" in gambling parlance and as the client, you are now at the table and life's cards are getting dealt.  Hand after hand goes by and most of the time, the house collects a chip and time moves along, only without the free beverages and attractive servers.  You wonder why you keep playing.  Gosh, you have sat here all this time and things are colder than a Santa Claus's freezer.  Then, maybe it's you, maybe it's the guy sitting next to you,  and the 'winning' number comes up.  Perhaps it's a fender bender.  Maybe that dinner out didn't agree with you - at all. Or, God forbid, maybe it's something much more serious.  Whatever it is, it is in my view the only place where the power of a collective works properly.  More people pay premium and do not have claims and they in turn provide the financial backing mechanism and this allows the insurer to protect against life's major and minor financial tragedies for those that do.  Insurers know statistically that most things for which they insure will not happen to most of the clients they insure.  Otherwise, there is no way they could stay in business.  They must be able to make a profit in order to survive.  However, they also know that some of the things they cover will happen to some of the clients they insure.  If they didn't, no one would buy the insurance because they was no appreciable need and again the company simply wouldn't survive.  In the end, that's the key.  No one want's to be the one that has to file the claim for the damage they've suffered in whatever form that damage may take.  Insurance is designed with the goal of making the client "whole".  In many ways, and depending upon the loss, it can never fully accomplish this goal.  However, what a quality company and insurance plan can do is help to make the situation much better than it otherwise would be and to protect the insured from major, minor and sometimes devastating financial losses.  Occasionally (okay, often), the particulars can seem a bit dull, but the reality for those who are suffering in ways large & small when the reality of a loss comes home to them, is anything but.