(quoted from post at 12:21:05 11/04/15)
(quoted from post at 19:53:36 11/02/15) "Good insurance" is not an option. Even if it was, the best (and worst) insurance is particularly good for insurance companies. You don't see them scrounging up office space in an old barn, or in a formerly abandoned warehouse in the dead part of downtown when their payouts hit hard. Nope, they take your premiums and do quite well by them as part of "managed risk" - the overwhelming odds that most of their policy holders will never make a substantial claim. You likely won't ever see your broker "broke", nor the company they work for. In the worst case scenarios, the gov (your tax dollars) bails them out, after deduction a substantial portion for "management fees".
I'd much rather send someone like Allen a check that does real good to someone who does real work, than send a check to someone who pushes paper and collects bonuses on up-selling riders that bring in more revenue than risk, who in turn might send a small portion to someone who has "suffered a covered loss" (not valid in all instances, some exclusions may apply; read your policy carefully, document everything, and be prepared to hire a lawyer).
Your comments are offensive to the hundreds of thousands of folks working very hard to provide very much needed financial services and protection to the public and quite ignorant of what really happens in the insurance business and why things are what they are.
Did you know that insurance is one of the most regulated businesses in the country? In my job I have to comply with regulations and laws from the 46 states that we operate in. Each state has their own set of laws and the state department of insurance has reams of regulations on top of those laws. Companies are required by law to set aside a certain part of that premium you complain about to pay future losses. Companies are required by law to only invest that set aside, called policyholder surplus, in certain non risky assets, like real estate, bonds, cash and cash equivalents... very little in stocks. So you might say those buildings and offices are required investments... why would a company put money in some other firm's office building when they need one for themselves? I hope I don't need to say anything about the millions that are paid for the steel, concrete and glass, etc. and the payments to the workers in those businesses and to the truckers who haul it and the construction workers who build it all.
You say that we send a small portion to pay losses, that's the height of ignorance. My company is currently paying in total around 100 to 102% of the premium we take in for expenses, commissions, losses and loss expense. Of that about 96% is paid in losses, hardly a small amount, and this is about the same for all companies. In catastrophes like hurricanes and tornadoes we pay in the area of 140% of premium. How can that be?... the extra is paid out of policyholder surplus. Unlike some grand government schemes, like Social Security, we don't take in a dollar and pay it right back out. We build surplus until it is needed for catastrophe. All of this is again, regulated and required. If you don't like it get the law of your state changed. In the end all this is required to make sure every legitimate claim gets paid.
You never see an insurance company broke because when they do go broke, and they do all the time, you never see it, they just disappear and the state takes them over and liquidates them. When their money runs out all the other companies pay through a state guaranty fund to make sure all the claims get paid.
See? It's much more complicated than you know. And this is just scratching the surface.
