Low Cost Insurance. Is It a Good Deal or a Complete Rip-off?
Author: Attorney Jason Macri
Many insurance companies aggressively advertise low rates and discounts in an effort to get your business. They use television commercials with friendly looking animal characters and spokespeople in an attempt to convince you that they can save you money or that they will stand by you if you get in an accident or make a claim. Though it is effective advertising, is the product being offered worth the savings?
Keep in mind that insurance is a multi-billion dollar business. Many insurance companies are public companies with shareholders. Their main objective is increasing profits. They are no different from any other business operating in a capitalistic society. Though they may advertise that they are your good neighbor or your friend, they are beholden to the almighty dollar and if it comes down to choosing to protect you or that dollar, you can guarantee the dollar will win. Unfortunately, it is the richest insurance companies who have the ability to do the best marketing. They can afford television advertisements during prime time and have their ads displayed on the busiest websites with the most visitors. There is a huge cost to this type of marketing, however, and the cost of that marketing is typically passed on to you, the consumer.
Ask any attorney who specializes in making claims against the largest of the low-cost insurance companies and odds are that you will get the same story. The attorney will present a claim to the insurance company and will eventually make a demand, requesting that the insurance company compensate their client for injuries sustained in a car crash and the damages that accompany the injury. The insurance company will typically respond with a low-ball offer which can never be intended to compensate the injured person for everything they went through. The attorney making the claim will become extremely frustrated with the seeming lack of care coming from the insurance company and the attorney will then have no choice but to sue the person who caused the crash. Basically, the low cost insurance company is forcing the injured person’s attorney to sue their insured. So while the person bought the insurance to protect themselves, their own insurance company is operating against the interest of their insured, causing them to be sued for something that, in most cases, could’ve been worked out.
The insurance company’s business model is simple. Bait the consumer by promising low cost insurance and various discounts. Get as many people to buy your insurance as possible. Take in massive dollars in the form of insurance premiums. Then, when somebody gets injured and needs to make a claim for their damages, either deny the demand or make an insulting offer to the injured person. That way the insurance company can minimize the amount of money they are actually paying for claims. As a result, the shareholders enjoy massive profits. As a byproduct, the injured person gets screwed. When the attorney for the injured person realizes that the insurance company will not fairly compensate their client, a lawsuit is filed. Now the person who bought the insurance gets screwed as well. Basically, everybody loses except for the insurance company who has figured out how to turn massive profits by making promises of savings combined with the undervaluing of claims.
If any of what is written above is upsetting to you then take action! The simplest way to make a change is to get rid of the cut-rate insurance and find a company who will protect you. You won’t find their ads on primetime TV or in your favorite magazine. Instead, they will be spending that money on fairly resolving claims. This is what you should expect from your insurance company and you should settle for nothing less. While you may be able to save a few dollars now by buying one of those low-cost insurance policies, you may regret it in the end when that very same insurance company refuses to protect you and causes you to be sued.