Mapping The Insurance Maze

I’m sure just reading the title, one might ask “Mike, what do you mean the inner thoughts of a Claims Adjuster?

Today’s discussion is something, that I have went back and forth with about writing, but I think it bares having a discussion. What is insurance? What is it for?

I ask this question, and I can’t wait until others engage in the conversation, because sooooooo many people think that insurance fixes everything, every time something happens to your home or vehicle, and the sad reality is, it does not.

Insurance is a contract of indemnity. In other words, insurance is designed to get you back to pre-loss condition, pending the loss is coverage is afforded, for you payment of the policy.

Let’s start with auto insurance. I mentioned in Auto Insurance 101, that there is no such thing as full coverage, unless you elect to select and pay every coverage available, and even then there are things that are not covered. If you have no Comprehensive or Collision coverage, and you cause an accident, there is no coverage to repair your vehicle. If an animal hits your vehicle, it’s stolen, lightning strikes it….there’s no coverage. Auto insurance is designed to get you back to pre-loss condition, given you have selected the proper coverages.

Oh yeah…you can’t use it because you need an oil change, and you don’t want to pay for it. 🙂

Home insurance is there when you have had a loss, that is typically “sudden and accidental”. If you have had a plumbing leak that has been occurring for years….chances are, if you submit for a claim, it will be denied. Your home insurance policy is not a maintenance policy. So often, customers become furious when they receive a denial of coverage, because they don’t understand what their insurance is, and think it’s a “catch-all”.

In a study completed by Forbes, (Metz, 2022) 72% of homeowners did not understand their home insurance. They paid for it, but did not and do not have a clue what it does and how coverage applies. It is my hope and goal that each article written shine some light about the individual policies. Feedback helps me know which way to write, and what to explain. It is my goal to personally help reduce this 72% by explaining and clearing the confusion.

I look forward to the continued shared learning.

~ Til Next Time

Metz, J. (2022, November 7). 72% of homeowners don’t understand essential home insurance coverage. Forbes. Retrieved November 29, 2022, from https://www.forbes.com/advisor/homeowners-insurance/survey-homeowners-insurance-knowlege/