The Value of Insurance

Recently, I was reminded of two myths about insurance.

1. All insurance policies are created equal.
2. All insurance companies are created equal.

I admit I am an insurance nerd and that most people hate insurance so they think about it as little as possible. Let me make this easy, quick and painless—the true value of insurance is determined at the time of the loss.

Eek! That’s right. You will not understand the value of your insurance until you have a problem. It is after a loss that you will realize if you have a Mercedes or a Ford Pinto.

The facts are these:

• All insurance policies are NOT created equal. An insurance policy is a contract and every contract has specific language that guides how adjusters settle their claims. While there is a common form, every company makes changes to this form as it sees fit. They may be small changes with huge ramifications. One small clause can change an entire loss settlement.
• All insurance companies are NOT created equal. Insurance companies are like all other classes of companies. There are ethical companies and those who live in gray. There are companies that treat their employees with respect and dignity and those that use their workforce as cheap labor. There are companies who treat you the way you want to be treated. . . and all the rest.

A short time ago, one of my clients’ was involved in a car accident. The adjuster from the insurance company was on top of the claim from the beginning. Although the woman whose car my client hit was not easily appeased, our adjuster was able to work out a solution that was amenable for both the claimant and my client. After the solution had been presented, I spoke with my client and he said, “There isn’t one company in a hundred that would take care of you the way this company took care of me.”

Yes, I thought. True value realized. I couldn’t have said it better myself.