by hummingbird » Mon Dec 31, 2007 04:39 pm
My in-laws filed a claim with thier insurance company. The floor underneath their hot water heater had collasped. The insurance would not pay, said the floor would have to completely fall to the ground .Does homeowners insurance pay for termite damge? They claimed it was water damage although the hot water heater never leaked. I fill like like a lot of insurance company fail their customers.
Posted: Mon Mar 10, 2008 11:37 am Post Subject:
you've made some good points Dasfuk
Seeing this industry from the inside from different jobs, it is my understanding that most insurance companies make thier money on auto and commercial policies, and not on homeowner's policies
However most (if not all) insurance companies actually make their money on investments, we don't pay our premiums, then they just set there in the bank, waiting to pay a claim. this money (premium) is used to invest (of course there is plenty set in 'reserve' to pay claims)Posted: Mon Mar 10, 2008 03:56 pm Post Subject:
Sounds kind of like the banks. They loan out your money.Then they make money on interest. No, the loss of one policy would probably not be noticed, till the company was was bad everyone started taking their business somewhere else.
Posted: Tue Mar 11, 2008 04:07 am Post Subject:
Yeah, I forgot about investments. My point was really homeowner's policies. They drop 10's of thousands of policies in FL and don't blink. Investments aside, they may pull in 5 to 7K per year in premiums from these people in FL but will pay out at least double that after a 3% deductible on a hurricane to each policy. The same would go for a simple hail claim in Ohio. They would collect around 500 to 700 per year in premiums but would have to pay out 10K for an average hail claim to someone with a comp roof and aluminum/vinyl siding.
Posted: Tue Mar 11, 2008 04:38 pm Post Subject:
I was thinking after a natural disaster that i heard of some Insurance companies folding. has anyone else heard that? Guess they were not able to stand the huge number of claims,but like you say it is a judgment call.
Posted: Tue Mar 11, 2008 05:28 pm Post Subject:
Some companies have been required to shut down after major catastrophes such as Hurricane Katrina because the amount of the losses would bankrupt the company. Most companies buy reinsurance to help protect them in these situations.
As for auto insurance, I know in Texas, you can self insure and not have to pay a company a single premium. But, this requires purchasing a bond with the state in the amount of $55,00 currently, going to $75,000 in April. You have to pay for any damages to others property and their injuries. You also have to provide your own legal representation should suit be brought against you.
Self insuring and paying out your own claims can be much more costly than just paying a monthly premium and letting the insurance company handle it.
Always protect yourself also, just because everyone is supposed to carry some sort of insurance, don't assume you don't need PIP, medical payments or uninsured motorist. The mistake most people make is not having enough coverage to protect themselves.
Accidents happen, most of us are fortunate enough to not ever have to use our insurance. But, if the day comes that any insurance company has to pay out hundreds of thousands of dollars on your behalf or to you, you'll be glad insurance exists.
Posted: Fri Mar 14, 2008 03:03 pm Post Subject:
Wow! That would be expensive to insure your self.I sure could not afford it.
When you say some companies have been required to shut down ,what does that mean? As does that mean the insurance companies have insures to protect them from going under in case of huge payouts like the hurricanes?
Posted: Fri Mar 14, 2008 06:10 pm Post Subject:
Most carriers have Reinsurance carriers to handle larger losses (insurance companies for insurance companies). But carriers are required by every state to maintain sufficient assets to address losses. Audits are done every year to look at the number of polices verses losses. The state can require the carrier take certain actions (write fewer policies, increase assets, stop writing policies, etc) in order to make sure they can pay losses that occur. There are also some last ditch efforts that happen, such as the state taking over the handling of a carriers business. In that case a 3rd party is usually hired to make sure all claims are paid with the carriers assets and the state approves all such payments. Thinks like that are in place to make sure no insurer's loose out (but it can still happen).
Posted: Sun Oct 10, 2010 08:43 am Post Subject:
Just wanted to see what it was like to reply to a thread over 2 years old.
Thanks, it's now out of my system.
Posted: Sun Oct 10, 2010 09:45 am Post Subject:
F'in annoying is what it is....
Posted: Mon Oct 11, 2010 01:26 am Post Subject:
Dasfuk . . .
Your two year old "investment" analogy is precisely the reason that no insurance policy should ever be considered an "investment".
(I'm sure this will reinvigorate the thread to the utter consternation of tcope!)
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