Good News: IT’S INSURED!

The insurance industry often is made out to be the boogie man when it comes to responding to claims. If you believed all the ads that question the sincerity and character of insurance professionals, you’d think nary a dollar was spent to settle a claim or that policyholders are systematically ripped off with lower than advertised settlements. Your personal experience may be the best measure but here are some statistics and experiences to ponder.

Let’s start with what insurance is all about. Insurance is when a person or organization pays an insurance company to assume the financial risk of unexpected mishaps or failure to perform. From property losses (homes, autos, buildings, etc.) to liability for injury to others (libel, medical bills, lost income, etc.), insurance provides people and organizations financial protection.

Insurance is a contract – an agreement that lays out who, what, where, when and how much the insurer will be responsible for the policyholder’s losses; how they protect you, your family members, or your company against financial loss including allegations of wrong-doing. Insurance contracts have a long history based on two factors: people’s needs and the ability of insurance companies to predict the odds of having to settle claims. Take a look.

At Clark Insurance, we handle about forty to fifty million dollars of customer claims annually through all the insurance companies we represent. The vast majority are completely satisfied.

Insurance companies are highly regulated in terms of having enough assets to pay the claims that occur and many buy insurance from re-insurers to protect against the “once-in-a-lifetime” disasters. A recent good example was the record-setting snow fall in Massachusetts this past winter. Some insurers had to tap their own reinsurance to pay for all the ice dams, collapses and water damage from burst pipes.

If you feel prices are too high or coverage is too little, it may help to know that consumers benefit from competition among insurance companies. An insurance company can’t succeed if they are not competitive. That’s where independent agents like Clark Insurance come in – they shop your needs with multiple companies to get the best coverage at the most competitive price. Agents also consider the track record of the companies they represent in terms of claim settlement, ease of doing business and customer satisfaction.

In the health care arena, millions of claims also are paid in a timely fashion for everything from wellness visits to life-saving surgeries to treatments for chronic diseases. The track record of fulfilling the terms of their contracts is remarkably good.

When buying insurance, consumers and employers want to be sure they are covered by “A” rated insurance companies. The industry relies on an independent rating organization called A.M. Best to regularly review the operations and financial strength of all the major insurance carriers.

A final and important decision for consumers is to discuss the depth of knowledge of your agent – their understanding of the fine print. You’ll want to ask for examples of their going to bat for customers if coverage has been denied. What were the issues? How did it turn out? Was it because the customer chose not buy coverage or because the agent failed to offer it?

Every day across America and the world, insurance serves as the foundation for the economy. The insurance industry’s reputation depends not on making profits but on paying claims that are part of their contracts. Without insurance, far too few people would be able to sustain a loss, buy a home, secure financing or take a risk to build a new business. The industry isn’t perfect but through reasonable regulation and sound business practices, it’s pretty close.