Key Issues In Insurance

Getting low cost car insurance  is all about risk and risk management. On the side of the insurance company, much like a bank, you represent risk.

They charge you a certain amount of money and in a sense are actually gambling that you will not cash in.

Many people go from one year to the next never making a  claim and the game is loaded in such a way that the insurance company will always come out on top.

This is why they have such a thing as an excess payment requirement in the event of a claim. What that money is doing is maximizing their profit. So, not only have you paid your annual premium, of, say $900.00, but also you end up paying, say, $400.00 excess

That is a total of $900.00 and they have paid out, say, $4000.00. Now this may seem unfair but remember – you are only one of many many customers and up to 85 % of all customers never make a claim.

This means that, hypothetically, out of every 100 customers an insurance company has 100 pay $900.00 = $90,000, 15 claim pay a further $400 each = $6000 = $96,000 in and 15 people cost the company $4000 = $60,000 out.

This equals a profit of $36,000. And that is just based on customer base of 100. Most insurance companies have a customer base of thousands so you could quite easily multiply the above profit by ten and still be underestimating how much car insurance companies pay out.

This does not include all the claims that get denied because of consumer incompetence and false applications

Which brings the writer to the next point. The need to supply an insurance company with 100 % absolutely true information cannot be over stressed.

 Nowhere is this more important than on your application. If these details are incorrect you can be denied cove in a matter of moments and never be allowed it again