OK... Big giant asterisk here first... Some of what I'm about to say is unproven, although I believe it to be true. Feel free to email me to dispute what I say and I will definitely be happy to listen to what you have to say about this. Education on a topic is sometimes skewed by one's beliefs, so I'm going to try to be unbiased. :)
Why do some people hate insurance companies? Insurance company's profits are usually around 3% !!! They are highly regulated by the States. People complain that their rates are too high. Can people see that insurance companies are simply a pass-through for our money?
Car crashes... SOME car repair companies sometimes over-quote since they know insurance is involved. We tell people to please get 3 quotes. Sometimes, they are 50% apart!! I KNOW this is true SOMETIMES for glass companies too. You can tell them that there's no insurance involved and get a quote for $180 for a windshield, and someone else calls back on the same day for the same exact car and they say there is insurance involved and it's over $400?? The list of examples goes on and on and on.
How about Fraud. Insurance companies have to employ people to fight this! I don't have a lot of stats on this, but I know it's a HUGE deal and it makes our premiums go up and up and up! Some fraud is really black and white, but others... not so much... did you have a fire? how much was that watch that got burned up REALLY worth? Even some good people will stretch the truth!
Frivolous law suits. Yep, they're out there... lots and lots and lots of them. Here again, I don't have stats at hand, but I know it's another big deal that the insurance companies have to hire people to fight against and many times just pay out to settle to reduce court costs whether right or wrong! Not to mention valid law suits where people get more than they deserve? OK.... I know this is debatable on many levels, so please don't grill me or razz me on this one!!
You can apply these issues to any type of insurance! Car, Home, and Health (have you seen pharmaceutical profits!!??) are probably the big ones. I know Medical Malpractice is a big one too, but I'm not much of an expert on this one, but I heard 1/3 of doctor's salaries go to pay for this.
So the next time you want to complain about your insurance rates, trust me, I completely agree.... but please don't blame the insurance companies!!!
Submitted by Andy