People would sometimes grumble whenever they have to pay their insurance premiums. The cost of insurance premiums, the seemingly waste of good money (for drivers who are accident free) and the huge amounts of cash these insurance companies seem to be making adds to your annoyance.
It seems unfair that as a brand new driver you are subjected to paying high premiums when you have never had an accident. On the other hand, your insurance premium payments are also high because you are a senior citizen.
The other thing about insurance companies that bugs people is that they are all privately owned,which means that it is profit driven. Unlike government run businesses that subsidizes its services so that it is more affordable to people.
The most contact the government has with these businesses, is through the regulating of the policies of these insurance companies.
How come the government does not have its own insurance company?
The fact is we only understand one side of the story and that is when we have to pay our premiums. The other side of the story has to do with the fact that the business of insurance is a very high risk business. Which is made even more volatile by trying to calculate variables that you have absolutely no control or influence over.
Being covered by insurance is actually a safe-guard for the public, which helps to reduce the likely hood of an accident; because to obtain car insurance you must have a valid driver’s license, your driving record is taken into account, especially if you have any DUI’s. If an individual does not meet these requirements then he will not be insured.
Having insurance really means that you will be ‘reasonably covered’ in an accident. It doe not mean that you will be fully covered. Suppose you caused an accident and the cost of repairs for the other guy’s car is fifteen-hundred bucks. Which is more than you are insured for in an accident.
Your insurance company will either pay for the guy’s repairs in full and raise your premium to compensate for the extra cash they paid out. Or they will only pay the amount you are covered up to. The rest will come from out-of-pocket.
If the government were to run insurance companies, it would mean a tremendous drain on its resources, because nothing less than a perfectly working system would have to be put in place to regulate all of its insured clients.
In addition, insurance companies pay out billions in claims every year and in order to lessen payouts. Insurance companies have been accused of using stalling strategies. Hence the reason why people have grown to distrust insurance companies with a passion.
If the government was placed in the position of always having to pay out claims, then it would bankrupt itself. And if it chooses to drag its feet on claims people may be inclined to civil unrest. The point is, regardless of the perception you may have of insurance companies. They provide a valuable service and a counter-balance to the way things are run.
Author’s Bio: Steven Brown is a renowned author who writes for Insurancecompanies.org . His articles have always been found useful by the readers.