insurance companies are a rip off?

Question

There are people who lost houses as a result of Katrina and as of today they have gotten shafted by thier insurance companies. Why doesnt someone get togeather and file a class action lawsuit aginst thoes companies and make them pay? p.s. if you work for an insurance company you aught to be ashamed of yourself.

Answer 1

I've worked in the insurance industry for 15 years, and I am NOT ashamed of myself. But you should be, because you obviously don't have any idea what you're talking about. Ignorance is scary. You obviously don't understand how the insurance industry works, and you believe everything you hear on TV or read in the papers. Do a little research before you start wagging your finger at people.

Answer 2

There were/are class action suits against insurance companies. Some of them have been settled, and the decisions were in the insurance companies favor, as they said the damage was caused by flooding, not as a direct effect of the hurricane(s).

I don't deal in P&C (property & casualty), because I don't agree with some of the ways they do business. I deal strictly with life, health, disabilty, and investments.

1 in 1,200 people will submit a claim on auto insurance, 1 in 12,000 for home owners, but 100% of people will submit a claim for life insurance.

IMO, I effect peoples lives more than any other resource or means known to man. I protect family lifestyles, should they lose a loved one. I ensure, that while they may have lost a loved one, they can continue to live financially as if they were still there, without dealing with the hardships and stress that can be faced when losing income.

So do I feel ashamed for working for an insurance company? Not at all. I know if I do, and explain things properly, there will be no unexpected mishaps when tragedy strikes.

As far as this comment,

It's amazing how much money people pay for insurance and how little they understand it.
THEY are the one who should be ashamed of themselves.

it is the job of the insurance AGENTS to EXPLAIN the coverage to their clients. The consumer is in no way going to be able to comprehend everything about their policy, without working for that company or being in the industry. They should be contacted annually to review their coverage, and sat down, explained what they have, what it covers, what it doesn't, and all of that documented for when a friend of family member comes to you and says "You never told them!"

So if an agent is doing their job, the consumer will receive an education about what they have. Only those who refuse to meet are then, IMO, guilty of being responsible for knowing what kind of coverage they have.

Answer 3

People who are uninsured lost their homes as a result of Katrina. People who had their homes paid off and chose not to pay for homeowners insurance and flood insurance anymore lost everything because they chose to gamble with their life's savings and they lost. Sadly, many companies and thousands of volunteers have worked very hard to try and rebuild but lack of support from the federal government and lack of homeowners being properly insured has resulted in catastrophic losses. I work for a company who was onsite within hours donating care tens of thousands of care packages of food to victims. Our company donated generators, buses, trailers, and many others items totalling millions without question and all without any public acknowledgement. Our CEO was onsite throughout the ordeal helping families but never once did I see an article, a press release, or anything else in the news although our inter-company news bulletins constantly kept us informed as to how all of us could help the efforts and exactly what was being done from my company. So I say to you who feel shafted, not all companies shaft their customers. State Farm should be put out of business for not paying out and standing behind their customers along with any other company out their who doesn't hold true to their contracts but don't classify ALL companies in the same boat. The devastation from Katrina on homes is there because the home owners could not afford to rebuild when they did not have flood insurance to cover the cost of fixing the home once the water was gone.

Answer 4

Oh, come now. Insurance is a business just like any other. These people are in it for the money and saying someone should be ashamed is cruel to the guy who is just doing a job like any other. The thing is, you fail to understand what insurance IS. You are making a bet with the insurance company against yourself. You are betting you will have an accident. They are betting you are not. They win if you never have an accident. They lose if you do. When it comes to thing like national disasters, the language becomes the key to whether you win or lose. Most people do not have a lawyer analyze the legalese in the contract and thus are unaware of what exactly is covered. You can safely bet the insurance company legalese in the contract lets them off the hook for a payout. The only recourse is to take them to court, and it is likely the insurance company will not have to pay because of the language. I am not covered by flood insurance. I know this. It is clearly stated in my policy. As a matter of fact, flooding is specifically excluded in my home owner's insurance. But then, I am at 700 feet above sea level even though Puget Sound is less than a mile east of me so it really does not matter that I am not covered for flooding. If I get flooded, I will have much bigger problems to deal with. So, if you consider that insurance is no different from placing a bet at a racetrack, it isn't a ripoff at all. The problem is reading the fine print; most people do NOT read the fine print and if they do, do not understand it. I used the services of a lawyer when I bought my home owner's insurance, so I know exactly what is covered and what is not. For Katrina, it seems the problem is what exactly constitutes "flooding" when it comes to an "act of god." Evidently, a storm surge, is legally considered flooding so it is specifically excluded by most home owner's insurance. The people inside the levees who got flooded should have had flood insurance separate from their home owner's policy. If they did not, then it is only themselves they have to blame. Ignorance is no excuse for not doing your homework. Personally, I think ALL insurance is a scam but the law says I have to buy it! Thank YOU to all of you idiot politicians out there who made THAT law!

Answer 5

In times of natural disaster, it is the government that should be held accountable for initial aid. Some people did not have, or, indeed, could not buy, the insurance that would have protected against every possible peril. The government could have heeded warnings and built the levees to higher standards, which would have saved billions of dollars in damages. They didn't. Not only that, they are only repairing them to previous standards. The government didn't even have people on the scene helping as fast as they can send help halfway around the world. It is odd that Canadian aid workers were patrolling the flooded streets before FEMA deployed aid. Several countries were told NOT to send aid because the US could look after their own. The US government would not let Cuban doctors in the country to help treat sick and injured, despite the fact they didn't have enough medical help on the scene. As far as insurance goes, the government could long ago have ordered all claims be honoured and sorted out the paperwork later. Instead they ordered a boatload of mobile homes then left them sitting in a field waiting for paperwork.

Answer 6

Insurance companies are a business and they have one purpose, to collect more in premiums than they pay out in claims. To assist them, they have actuary accountants to analyze the risk, and teams of lawyers drafting the policies in the light most favorable to the insurer. The consumers of these products are lay people who can not understand how to read and interpret a policy which requires reading the coverages along with the decelerations page, exclusions and endorsements. Assuming the insured even tried to read the policy there is a very high probability that they would not be able to understood it anyway. (In fact, I have been in depositions were some of the big insurer's own lawyer's had a difficult time reading the policy). Insurance agents are sales people--not professionals as they like to proclaim to gain your trust. When the rubber hits the road they will claim that the did not explain the entire policy to their client because it would take several hours to do so rendering there ability to earn a profit, by selling policies to other insureds, too difficult – they do not have enough time to tell you what you need to know because they are not compensated for explaining things to you. They will be your best friend when they are trying to sell you but call you stupid for not reading the policy after the fact if an issue arises.

One problem lies in the way that the Insurers sell their product. You can not watch any sporting event without having some insurance company convince you that they are "good neighbors" or that you are in "good hands." The insurers lull consumers into believing that there is no need not to trust their insurer after all, if there is a claim, the agent is going to drop everything, come to your need, pay your claim and coach your kids soccer game, all before the close of business. In reality your agent is just a sale's person who has no more authority with their company in adjusting your claim than you do.

Problem number two, the laws which govern the insurance industry are written by . . . the insurance industry. We know who to thank for that. It is very difficult to hold a company responsible for they way they adjusted the claim until you have won on the issue of whether money is still owed under the policy itself. Insurers will ignore you because they can. Just ask Trent Lott who was all but ignored by his insurance company until he hired someone his political party vilified in the 2004 election-- a lawyer who enforces the rights of the individual.

Problem number three, insurers have been caught cheating when they adust claims. Lets just set aside the argument of whether Hurricane insurance should pay when a hurricane causes damage to a home with title surge. Property insurance carriers have been caught hiring unethical engineers to renders opinions which favor the insurer. The good neighbor company got caught blackmailing an engineering firm to change their opinions from damage caused by wind to damage caused by flood just so the good neighbors would not have to pay--they would not pay the firm until their opinions changed. The same can be said of the field adjusters who were selling alarm systems prior to the storms but heard how much money they can make by going to adjust storm damage--these people are not paid until the insurer feels the estimate of damage is correct in the eyes of the people who have to make payment (the insurance company)--no conflict there. The good hands people have a proprietary interest in the company that manufactures their adjusting software and surprise, the estimates of cost to repair damage generated software for Allstate is artificially lower than for the software sold to others. Insurers depreciate damaged property arbitrially and without full payment until you make final repairs and jump through many hoops all with the design to frustrate you into giving up full replacement cost of the damage. The more you know the more you don't want to know. If you ever want to stump an adjuster, ask how it is that drywall or crystal glassware has depreciated in value based on age and condition.

Insurers have an obligation to find coverage and act in the best interest of the insured. However, how fairly an insured is treated is directly related to their level of sophistication --this should not be the case. Some have the opinion that these people should not be ashamed of themselves because they are simply doing their jobs. Those who wield such an argument should also realize that the Nazi SS were just doing there job as is any common drug dealer.

Answer 7

Boy lawyer sure do have folks brainwashed!! Anytime someone thinks a company did 'em wrong, they want to file a class action lawsuit.

The only people who make money on class action lawsuits are the lawyers.

Answer 8

Spoken like a person lacking education in the Insurance industry.

NO company is in the business of GIVING away their services so whats with that comment?

Answer 9

It's amazing how much money people pay for insurance and how little they understand it.
THEY are the one who should be ashamed of themselves.

Answer 10

Katrina proved that insurance companies are not about "helping people" They clearly showed that they are about maixizing profits.

If the Bush administration should be hels accountable for anything about katrina, it shold be the way that they allowed the insurance companies to effectively steal from the people who were insured, and abandoned by the insurance companies.

That was criminal.