Sunday, December 2, 2012

Insurance Companies Work for Shareholders, Not Customers

I just read a great article on the internet !!!!

Insurance Companies Work for Shareholders, Not Customers

This article was written by Luke Landes 

Please read the entire article as I believe he makes some excellent points like: 

"The entire concept of insurance, particularly public insurance companies with shareholders, is backward. If a company is to survive year after year, it has to make money for its owners. In the case of public companies, executives answer to the board of directors and the shareholders." 

"Here is how insurance companies make money, reduced to the absolute basics:
  • Collect as much as possible from insured policyholders in the form of premiums.
  • Pay out as few claims as possible (but enough to avoid regulatory scrutiny) to policyholders.
  • Profit." 
"When you battle with a publicly-traded insurance company that doesn't want to pay your claim, it is trying to earn another fraction of a cent per share. You just want the company to honor your insurance agreement in exchange for the premiums you have been paying."

This is exactly what I believe happened in my case with Fidelity National Title Insurance Company.  I just wanted them to pay me for my loss that they confirmed was a valid claim - but then in order to protect the value of their shares for their shareholders - they valued the loss at $0.