Forget the myth of “Acts of God.” Here’s what your policy actually says.
The Storm and the Stonewall
A hurricane damaged my home. I wasn’t worried; I had a great homeowner’s policy. The adjuster came and denied my claim, calling the damage an “Act of God.” I thought that was a real thing. It’s not. “Act of God” is a myth; it appears nowhere in your policy. My policy didn’t exclude “Acts of God.” It had a specific, written exclusion for “flood and storm surge,” and another for “wind-driven rain entering through a storm-created opening.” My denial wasn’t based on a myth; it was based on the specific words I had failed to read.
Stop believing you’re “in good hands.” Believe in the policy contract instead.
The Hands That Held My Money, Not My Claim
For years, I believed my insurance company’s slogan. They were a “good neighbor,” and I was “in good hands.” After my first major claim, I learned the truth. The friendly agent who sold me the policy had no power, and the smiling adjuster on TV was replaced by a rigid negotiator whose only job was to minimize my payout. My good feelings and their marketing meant nothing. The only thing that mattered was the cold, hard language of the insurance policy. It’s a legal contract. Stop believing the slogan; start believing the contract.
The hidden truth about “full coverage” auto insurance that agents won’t admit.
The “Full” Coverage That Was Actually Empty
I proudly told my friends I had “full coverage” on my car. It made me feel safe. After an accident, I discovered the hidden truth: “full coverage” is a completely meaningless marketing term. It’s not a real insurance product. My policy had liability, collision, and comprehensive, but I had no rental car reimbursement, no towing coverage, and my liability limits were dangerously low. Agents won’t admit that they use the phrase “full coverage” because it’s an easy way to sell a policy without having to explain the complex and often inadequate reality of what you’re actually buying.
What nobody tells you about the myth of “matching” in property claims.
The Siding and the Awkward Patch
A hailstorm damaged the siding on one side of my house. The siding was 15 years old, and that specific color was no longer made. My insurance company agreed to pay to replace the damaged side, but not the other three. They said their policy doesn’t guarantee a “match.” What nobody tells you is that this is a common ploy. While the policy might not explicitly promise a match, many states have laws or regulations requiring a reasonable uniform appearance. I had to fight, but I eventually got them to pay to reside the entire house to avoid a mismatched, patchwork look.
I spent 10 years debunking insurance myths. Here’s the biggest one.
The Myth That Your Insurer Is Your Friend
The single biggest and most dangerous myth in the entire world of insurance is the belief that your insurance company is your partner or your friend. They are not. They are a for-profit corporation whose financial interests are directly and fundamentally opposed to your own. Every dollar they pay you in a claim is one less dollar on their bottom line. Their friendly mascots and heartwarming commercials are designed to make you forget that you are on opposite sides of a financial negotiation. Your relationship is contractual, not personal.
Unpopular opinion: Loyalty to an insurance company does not pay off.
The “Discount” That Wasn’t a Deal
I was a loyal customer of the same insurance company for 20 years. I was proud of my “loyalty discount.” Here’s the unpopular opinion: it was a scam. My loyalty had made me complacent. I stopped shopping around. Meanwhile, my rates had slowly crept up every year. When I finally decided to get quotes from other companies, I found I could get better coverage for 30% less than what I was paying with my “loyalty discount.” I learned that in insurance, loyalty is often just another word for “not paying attention.”
90% of people don’t understand that flood damage isn’t covered by homeowner’s insurance.
The Flood and the Fine Print That’s Not Even Fine
After a week of heavy rain, a nearby creek overflowed and flooded my basement, causing thousands in damage. I called my homeowner’s insurance agent, confident I was covered. I was wrong. The agent gently explained that my policy, like 90% of all homeowner’s policies, has an absolute exclusion for damage caused by flood. It’s not even in the fine print; it’s a major, standard exclusion. I learned that if you want coverage for rising water, you have to buy a separate, specific flood insurance policy. It’s the biggest gap in most people’s protection.
This simple fact about policy exclusions transformed how I buy insurance.
The Policy Is a Promise With Asterisks
I used to think an insurance policy was a broad promise of protection. I was wrong. A mentor told me a simple fact that transformed my entire perspective. He said, “An insurance policy is not a promise to cover you. It is a promise to cover you, except for this long list of things we will not cover.” That list is the “Exclusions” section. The real coverage is not in the promise; it’s in what’s left over after all the exclusions. Now, the exclusions section is the first, and most important, part of any policy I read.
You’re not being “lowballed” by the adjuster. You’re being offered the actual cash value.
The Check and the Second Check You Didn’t Know About
After a fire, the adjuster’s offer for my destroyed television seemed insultingly low. I thought I was being lowballed. I wasn’t. He was offering me the “Actual Cash Value” (ACV)—the replacement cost minus depreciation. What he didn’t emphasize is that under my “Replacement Cost” policy, I was owed a second check. Once I actually bought a new TV and sent him the receipt, he had to pay me back for that depreciation he deducted. Most people don’t know this, and they accept the first check as the final payment, leaving thousands on the table.
Stop believing online insurance quote comparisons are accurate. Buy from a human instead.
The Quote and the Missing Questions
I spent an hour on a website that promised to compare insurance quotes from a dozen different companies. It gave me a list of cheap prices. It was a complete illusion. The online form didn’t ask the detailed questions necessary to give an accurate quote. It didn’t ask about my home’s specific features or my driving record’s nuances. A cheap, inaccurate quote is worthless. I learned to stop trusting the algorithm and to work with a real, human insurance broker who could ask the right questions and get me a real, reliable quote.
The uncomfortable truth about “vanishing premium” life insurance.
The Premium That Reappeared
In the 1990s, my parents bought a “vanishing premium” life insurance policy. The agent showed them a projection where, after ten years, the policy’s own investment returns would be high enough to pay the premiums forever. It sounded magical. The uncomfortable truth is that it was based on an assumption of high interest rates that didn’t last. When rates dropped, the “vanishing” premiums reappeared with a vengeance, forcing my parents to pay much higher amounts in their old age to keep the policy from lapsing. It was a fantasy, not a guarantee.
Why everything you know about your credit score affecting your insurance is backwards.
The Score and the “Secret” Risk Assessment
You probably think your insurance rates are based on your driving record or your home’s age. The truth is, your credit score—or more accurately, your “insurance score”—is one of the biggest factors. Insurers have mountains of data showing that people with lower credit scores are statistically more likely to file claims. They see a low credit score as a sign of irresponsibility, and they charge you more for it. Everything you know is backwards. You think your premium is about your car; it’s actually about your perceived character.
I tried to rely on my auto insurance’s “towing and labor” coverage. It was a disaster.
The Tow and the Tiny Limit
My car broke down on the highway, and I was so relieved I had “towing and labor” coverage on my auto policy. It was a disaster. I called the number, and they sent a tow truck that took two hours to arrive. Then I got the bill. The policy only covered the first $50 of the tow, and the total bill was over $200. I learned that the towing coverage offered by most insurance companies is a nearly worthless, low-limit benefit designed to sound good but provide very little real help in a crisis.
Hot take: Insurance company “discounts” are mostly fake.
The Discount and the Disappearing Savings
Insurance companies love to advertise their long list of discounts: “good student discount,” “safe driver discount,” “multi-policy discount.” Hot take: they are mostly fake. These “discounts” are not applied to a standard, base rate. The insurance company can set that base rate wherever they want. They will often inflate the base rate and then apply a series of “discounts” to make you feel like you are getting a great deal. The only number that matters is the final premium, not the illusion of savings from a list of meaningless discounts.
Most people waste hours shopping for insurance online. A good broker can do it in minutes.
The Clicks and the Call to a Pro
I used to spend an entire weekend every year shopping for my home and auto insurance online. I would go to a dozen different websites, re-entering the same information over and over again. It was a massive waste of time. I finally found a good independent insurance broker. Now, the process takes one 20-minute phone call. I tell him what I need, and he uses his expertise and his industry software to instantly shop the entire market for me. He does in minutes what used to take me hours.
The 2-minute habit that replaced my fear of hidden policy exclusions.
The Word Search and the Sense of Security
I used to have a vague fear that my insurance policy was full of hidden exclusions I didn’t know about. I started a simple 2-minute habit that has given me total peace of mind. When I get my new policy document, I don’t read the whole thing. I just use the “find” function (Ctrl+F) on the PDF. I search for keywords that are relevant to my biggest fears, like “dog bite,” “mold,” “sewer backup,” or “trampoline.” This quick search instantly takes me to the relevant exclusions and tells me exactly what I need to know.
Your claim isn’t denied because of a technicality. It was never covered to begin with.
The Denial and the Discovery
When my insurance claim was denied, my first reaction was anger. I thought they were using a “technicality” or a “loophole” to get out of paying me. I was wrong. The reason for the denial wasn’t hidden in the fine print. The policy had a clear, one-page exclusion for the very thing that had happened. My claim wasn’t denied on a technicality; it was denied because the policy I had bought had never actually covered that risk in the first place. The problem wasn’t their loophole; it was my failure to read the contract.
If you’re not reading your policy’s definitions section, you’re already losing.
The Definition and the Denied Claim
I thought I understood my insurance policy. I was wrong. After a claim was denied, my lawyer pointed me to the “Definitions” section at the beginning of the policy. I had never read it. I discovered that words I thought I understood, like “business” or “pollutant,” had very specific and narrow legal definitions in the contract. My claim was denied because my situation fit their definition of an exclusion. I learned that you cannot understand a policy until you understand how it defines its own words. It’s the most important, and most ignored, section.
Stop glorifying low deductibles. Start understanding the cost-benefit analysis.
The Deductible and the Discount
For years, I proudly paid extra for a low, $250 deductible on my homeowner’s policy. I thought I was being smart. I was wrong. I did the math. By raising my deductible to $2,500, I could save over $500 a year on my premium. This meant that as long as I didn’t have a claim more than once every five years, I would come out ahead. I learned to stop glorifying the low deductible. Insurance is for catastrophic losses, not for small, manageable ones. A higher deductible is often a much smarter financial choice.
The real cost of a “cheap” insurance policy that nobody calculates until a claim.
The Premium and the Painful Payout
I thought I was a genius for finding a “cheap” homeowner’s insurance policy online. The premium was 30% lower than everyone else’s. The real cost of that policy was revealed after my first claim. The cheap insurer was slow, unresponsive, and their adjuster’s estimate was insultingly low. They fought me every step of the way. I learned that the price of a policy isn’t just the premium you pay. It’s also the financial and emotional cost of dealing with a difficult company in your moment of greatest need. A cheap policy is often the most expensive one you can buy.
What savvy consumers do when they see an insurance ad that others don’t.
The Ad and the Inconvenient Truth
An amateur consumer sees an insurance commercial with a funny mascot or a heartwarming story and thinks, “That seems like a friendly company.” A savvy consumer sees the same ad and thinks, “That company spends a fortune on advertising, which is a cost that is passed on to me in my premium.” They know that the company’s advertising budget has zero correlation with its claims-paying practices or its policy language. They ignore the ad and instead spend their time researching the company’s financial ratings and complaint ratios.
The myth of being “fully covered” is destroying personal finances.
The “Full” and the Financial Ruin
I told everyone I was “fully covered.” I had home, auto, and health insurance. I felt secure. This myth was destroyed when I was hit by an uninsured driver and suffered a major injury that left me unable to work. I had no disability insurance to replace my income. My “full coverage” was a hollow shell. I learned that “fully covered” is a meaningless phrase. You are only covered for the specific risks you have specifically insured against. The belief that you are somehow totally protected is a dangerous fantasy.
I quit bundling my policies and my overall cost went down while coverage went up.
The Bundle and the Botched Job
For years, I “bundled” my home and auto insurance with the same big-name company to get a “multi-policy discount.” I thought I was saving money. I wasn’t. I finally had an independent broker shop my policies separately. He found me a specialized auto insurer and a separate, high-quality homeowner’s insurer. Even without the “bundle discount,” my total premium was lower, and the coverage in both policies was significantly broader and better. The convenience of the bundle was just masking a mediocre, overpriced product.
Controversial: Your insurance agent’s primary job is sales, not service.
The Sale and the Service
Here’s a controversial truth that will trigger many insurance agents. Your agent’s primary job, and the way they are primarily compensated and judged, is sales. Their main goal is to sell new policies and retain existing ones. Providing you with great service is a means to that end, but it is not the end itself. When you understand that you are dealing with a salesperson, not a pure service professional, it changes the entire dynamic. You realize that you need to be a more skeptical, educated, and demanding consumer.
95% of what you hear about tort reform and insurance rates is wrong. Here’s why.
The “Reform” and the Refusal to Lower Rates
Politicians and insurance companies love to talk about “tort reform.” They claim that if we limit people’s right to sue, our insurance rates will go down. This is almost always wrong. Dozens of states have passed tort reform laws. The data shows that after these laws are passed, insurance company profits go up, but rates for consumers almost never go down. Why? Because the rates are not just based on lawsuit costs; they are based on what the market will bear. “Tort reform” is a talking point designed to increase insurer profits, not to lower your premium.
One small fact about “concurrent causation” eliminated my biggest misunderstanding about property insurance.
The Wind and the Water
A hurricane hit my town. The wind damaged my roof, and then the rain came in through the hole and destroyed my living room. My policy covered wind, but excluded flood. The insurer tried to deny the entire claim, arguing the damage was caused by water. I learned a critical fact about “concurrent causation.” My lawyer explained that because the first cause of the loss was a covered peril (the wind), the subsequent damage from the rain was also covered. Understanding that one small legal doctrine was the key to getting my claim paid.
The truth about how insurance companies invest your premiums that they profit from hiding.
The Premium and the Profit from the “Float”
You think your insurance company makes its money by charging you more in premiums than they pay in claims. That’s only half the story. The truth is, they make a massive amount of their profit by investing your premium dollars. They collect your money upfront, and then they “float” that money in the stock and bond markets for months or years before they have to pay it out in a claim. Even if they break even on the claims themselves, they can make billions in profit from investing your money.
Stop thinking insurance is a “necessary evil.” It’s a contractual financial instrument.
The Evil and the Essential Tool
Most people see their insurance premium as a “necessary evil”—a painful expense they are forced to pay. This is the wrong mindset. You should stop thinking of it as an evil and start thinking of it as what it is: a contractual financial instrument. You are paying a known, fixed fee in exchange for the legal right to transfer a potentially catastrophic, unknown financial risk to a third party. It is not an emotional purchase. It is a logical, powerful tool for managing financial uncertainty, just like a stock or a bond.
Replace your assumptions with a thorough policy review. Thank me later.
The Assumption and the Agonizing Denial
I assumed my homeowner’s policy covered a sewer backup. I assumed my auto policy covered me when I drove a friend’s car. I assumed my health insurance covered me when I traveled overseas. I was wrong on all three counts. All of my assumptions were shattered by agonizing claim denials. I learned the hard way to replace all of my assumptions with a single, thorough review of my actual policy documents. The 30 minutes it takes to read what you are actually paying for will save you years of regret. You’re welcome.
The industry secret about why your rates go up after a no-fault claim.
The “No-Fault” and the “Not-Your-Fault Surcharge”
I was in a car accident that was 100% the other driver’s fault. I was furious when my own insurance premium went up at my next renewal. Here’s the industry secret. Insurance companies have data that shows that people who are involved in any kind of accident, even a no-fault one, are statistically more likely to be involved in another accident in the future. They see you as a higher risk, regardless of who was at fault. That “no-fault” claim still results in a “not-your-fault surcharge.”
Why your belief that “it won’t happen to me” fails in the face of statistics.
The Lightning and the Logic
I live in an area with a low risk of tornados, so I never worried. I always thought, “It won’t happen to me.” This belief is a failure of logic. While the probability of a tornado hitting my specific house is low, the probability of something bad happening—a fire, a car accident, a major illness—over the course of my entire lifetime is nearly 100%. Insurance isn’t about protecting against a single, specific event. It’s about protecting against the statistical certainty that life is full of unpredictable and costly misfortunes.
I ignored the advice to get renters insurance for years. It cost me everything I owned.
The Rent and the Regret
I always thought renters insurance was a scam. I was young, and I didn’t own much. I ignored the advice to get it. Then, a fire in the apartment below mine caused massive smoke and water damage to my unit. The landlord’s insurance covered the building, but it didn’t cover any of my personal property. I lost my furniture, my clothes, my computer—everything. I had to start over from scratch. That cheap, $15-a-month renters policy I had ignored would have saved me from losing everything I owned.
Let’s be honest: “Replacement Cost” coverage rarely gives you the full replacement cost without a fight.
The “Replacement” and the Reality of the Check
You have “replacement cost” coverage on your homeowner’s policy. You think that if your house burns down, the insurer will just hand you a check for the full cost to rebuild. Let’s be honest: that’s not how it works. First, they will pay you the “actual cash value” (which is less). Then, you have to fight them over the real cost to rebuild. They will argue over every single line item. To get the full replacement cost often requires months of negotiation, hiring your own experts, and threatening a lawsuit. It’s not a promise; it’s the start of a fight.
87% of people get how health insurance deductibles and out-of-pocket maximums work wrong.
The Deductible and the Donut Hole
I thought my health insurance was simple. I had a deductible, and then the insurance would pay for everything. I was wrong. I was in the 87% who don’t understand how it works. After I met my deductible, I still had to pay “co-insurance”—a percentage of every bill. I learned that I had to keep paying my share until I hit my “out-of-pocket maximum,” which was much higher than my deductible. That gap between the deductible and the maximum is the donut hole where you are still on the hook for thousands in medical bills.
This weird habit of reading policies from back to front (exclusions first) outperforms everything else.
The Backwards Review and the Better Understanding
I have a weird habit when I get a new insurance policy. I read it backwards. I start with the last page—the endorsements. Then I read the main exclusions section. Then I read the conditions. The very last thing I read is the first page, with the big, broad promise of coverage. Why? Because the promise on the first page is almost meaningless. The real story of the policy is told in what it takes away. This backwards review gives me a much faster and more accurate understanding of what the policy actually does.
The real reason your neighbor got a better insurance rate (hint: it’s not their negotiating skills).
The Rate and the “Secret” Score
My neighbor and I have similar houses and cars, but his insurance rate was much lower than mine. I thought he must be a master negotiator. The real reason was much more personal. His credit-based “insurance score” was higher than mine. He had been in his home longer, and he had a cleaner claims history. The insurance company’s underwriting algorithm saw him as a more stable, lower-risk individual. It had nothing to do with negotiation. It was all about the secret, data-driven profile the insurance company had built on each of us.
Ditch your state’s minimum liability limits. They are a financial death trap.
The Minimum and the Million-Dollar Mistake
I was trying to save money, so I bought a car insurance policy with my state’s minimum liability limits. It was the biggest financial mistake of my life. I caused an accident that resulted in a serious injury. The other driver’s medical bills and lost wages were over $300,000. My “minimum” policy only covered the first $25,000. I was personally sued for the difference. Those state minimums are a financial death trap. They haven’t been updated in decades and provide a completely inadequate level of protection in today’s world.
Stop pretending your homeowner’s policy covers your home-based business. Get a real business policy.
The Hobby and the Uncovered Catastrophe
I started a small crafting business out of my spare bedroom. I thought my homeowner’s policy covered me. It didn’t. When a customer’s child was injured by one of my products, my homeowner’s insurer denied the claim, citing the “business pursuits” exclusion. The policy also had a very low limit for any “business property,” so when I had a small fire, all my inventory was essentially uninsured. I learned that the moment your hobby becomes a business, you need a real business insurance policy.
The 3-word phrase that changed how I think about what insurance is for.
Transfer of risk.
I used to think of insurance as a product, like buying a television. My perspective changed when I learned this simple, 3-word phrase: “Transfer of risk.” That is the entire purpose of insurance. It is not a product. It is a legal and financial mechanism that allows you to take a risk that is too big for you to handle on your own—the risk of a house fire, a major car accident, a lawsuit—and transfer it to a large entity that can handle it in exchange for a known fee. It’s not a product; it’s a process.
What the insurance industry doesn’t want you to know about “force-placed” insurance.
The Lender and the Overpriced Policy
I let my homeowner’s insurance policy lapse for a month. I wasn’t worried. Then I got a massive bill from my mortgage company. They had “force-placed” an insurance policy on my house to protect their loan. What the industry doesn’t want you to know is that this insurance is a scam. It is incredibly expensive, often two or three times the normal rate, and it provides very poor coverage. It only protects the lender’s interest, not your own equity or personal property. It’s a penalty designed to be so painful that you immediately get your own coverage.
I was today years old when I learned my homeowner’s policy has a limit on cash.
The Cash and the Coverage Cap
I kept a few thousand dollars in cash in a fireproof safe at home for emergencies. I thought it was secure. I was today years old when I read my homeowner’s policy and learned that it has a specific, and very low, sub-limit for the loss of cash. Most policies will only cover a maximum of $200 in cash, no matter how much is stolen or burned. The same goes for other valuables like jewelry and firearms. Your policy has specific, low limits for these items unless you have them scheduled separately.
Normalize questioning why your renewal premium increased.
The Renewal and the Request for an Explanation
For years, when my insurance renewal arrived with a higher premium, I would just sigh and pay it. I assumed it was just “inflation.” You should normalize questioning this. Now, if my premium goes up, I immediately call my agent and ask for a specific, written explanation of the rate increase. Is it due to a general rate change in my state? Did my own claims history affect it? Did the value of my property change? Forcing them to justify the increase holds them accountable and has even resulted in them “finding” discounts I was eligible for.
Plot twist: The biggest scam isn’t the premium. It’s the depreciation calculation on your claim.
The Depreciation and the Deception
Everyone complains about their high insurance premiums. The plot twist is that the premium isn’t the biggest scam. The biggest scam is the way the company calculates depreciation on your property claim. They will use an arbitrary, aggressive, and often indefensible depreciation schedule to dramatically reduce the “actual cash value” of your settlement. They will depreciate a 20-year roof by 75%, even if it was in perfect condition. This quiet, technical calculation is where they save millions, and it costs you a fortune if you don’t fight it.
The insurance myth everyone believes that gives them a false sense of security.
The Myth of “It’s Covered”
The single biggest myth that almost everyone believes is the simple phrase, “Don’t worry, insurance will cover it.” We say it after a car accident, a friend’s house fire, or a health scare. It’s a comforting lie. The reality is that insurance only covers what is specifically stated in the dense, complicated legal contract you bought. It is full of exclusions, conditions, and limits. Believing in the vague, hopeful myth of “it’s covered” is what gives people a false sense of security and leads to so much shock and disappointment when a claim is denied.
Stop optimizing for a brand name. Optimize for the policy language.
The Name and the Nitty-Gritty
I used to think that having insurance with a big, famous brand name meant I had the best coverage. I was optimizing for the wrong thing. A brand name is just marketing. The quality of your protection is not determined by the mascot or the slogan; it is determined by the specific words written in the policy contract. I now ignore the brand name entirely. I optimize for the policy language. I would rather have a policy from a company I’ve never heard of with broad, favorable language than a policy from a household name that is full of exclusions.
The brutal truth about why your “accident forgiveness” isn’t really forgiveness.
The “Forgiveness” and the Forgotten Surcharge
I had an auto insurance policy with “accident forgiveness.” I thought it was a great perk. After my first at-fault accident, my premium didn’t go up. I felt forgiven. The brutal truth was revealed when I shopped for a new policy a year later. My old insurer hadn’t surcharged me, but the accident was still on my claims record. Every other insurance company gave me quotes that were much higher because of it. “Accident forgiveness” doesn’t erase the accident; it just means your current company contractually agrees not to punish you for it. Everyone else still will.
Throw away your insurance declaration page as proof of coverage. It’s the policy form that matters.
The Dec Page and the Deception
Your insurance agent sends you a one-page “declaration page” every year. It shows your address, your limits, and your premium. You file it away, thinking it’s your policy. Throw it away. It’s just a summary. It is not the contract. The real proof of coverage is in the 100-page policy form booklet that your agent rarely sends you unless you ask for it. The dec page is a convenient, and often misleading, summary. The policy form, with all its definitions and exclusions, is the only document that legally matters in a claim.
The 30-second test that reveals if “full coverage” is actually full coverage.
The Rental Car and the Reality Check
To see if your “full coverage” auto insurance is actually full, try this 30-second test. Call your agent and ask this simple question: “If my car is in the shop for two weeks after an accident, what is the per-day limit and the maximum number of days my policy will pay for a rental car?” The answer will likely shock you. Most standard policies have very low limits, like $30 a day for a maximum of 15 days. That’s a reality check that proves your “full coverage” is far from full.
Why everyone is wrong about how life insurance payouts are taxed.
The Payout and the Probate Problem
Everyone thinks that a life insurance payout, or “death benefit,” is completely tax-free. They are wrong. While it is true that the death benefit is not subject to income tax, it can absolutely be subject to estate tax. If you own the policy yourself and the death benefit is paid to your estate, it increases the total value of your estate. If your estate is large enough, that payout could be the very thing that triggers a massive estate tax bill. The tax implications are much more complex than people believe.
Stop asking “am I covered?”. Ask “Under what circumstances would this claim be denied?” instead.
The Question That Flips the Script
When I used to talk to my insurance agent, I would always ask the simple question, “Am I covered for this?” It’s a weak, yes-or-no question. I learned to ask a much more powerful question that flips the script. Now I ask, “Can you please describe to me the specific circumstances under which a claim for this event would be denied?” This forces the agent to stop giving me a simple “yes” and to actually explain the exclusions, conditions, and limitations of the policy. It’s a much more revealing and useful conversation.
The habit of getting everything in writing that I wish I’d learned before my first claim.
The Verbal and the Vanished Promise
My insurance agent made a lot of promises to me over the phone. He told me I had coverage for things that, it turned out, I did not. When I had a claim and it was denied, his verbal promises had vanished into thin air. There was no record of them. I learned a hard lesson that I wish I had known from day one: get everything in writing. After every single conversation with your agent or adjuster, send a polite follow-up email confirming what was discussed. If it’s not in writing, it doesn’t exist.
Here’s why Dave Ramsey’s insurance advice is terrible for high-income earners.
The Debt-Free and the Dangerously Underinsured
Dave Ramsey’s advice to buy only term life insurance and to self-insure by becoming debt-free is great advice for a middle-class family. It is terrible, dangerous advice for a high-income earner or a high-net-worth individual. Their risks are completely different. A high-income earner needs massive liability limits to protect their future earnings. They need a sophisticated life insurance strategy for estate tax planning. And they need specialty policies for their unique assets. Ramsey’s one-size-fits-all advice is a recipe for financial ruin for anyone with a complex financial life.
I’ll say what everyone’s thinking: Insurance commercials are designed to mislead you.
The Mascot and the Misdirection
Let’s just say what we are all thinking. Insurance commercials, with their funny mascots, their catchy jingles, and their heartwarming stories, are not just advertising. They are a masterclass in misdirection. They are designed to make you feel an emotional connection to a brand, to make you believe that insurance is a simple, friendly product. They are designed to distract you from the fact that you are buying a complex legal contract from a for-profit corporation that has a financial incentive to pay you as little as possible.
The skill of reading a contract that matters more than a high credit score.
The Contract and the Credit
We are taught to be obsessed with our credit score. We see it as the key to our financial health. A far more important life skill is the ability to read and understand a contract. Your credit score might save you a few hundred dollars on a loan. Your ability to understand the insurance contract you are signing can save you from a hundred-thousand-dollar loss. In a world of complex financial products, the person who can read the fine print has a much greater advantage than the person who just has a high score.
This counterintuitive action of increasing your liability limits actually saves you money in the long run.
The Limit and the Lawyer’s Calculation
It seems counterintuitive, but buying a massive, multi-million dollar umbrella liability policy can actually save you money. Here’s why. When a plaintiff’s attorney is deciding whether to sue you, the first thing they do is look for your insurance limits. If you only have a small policy, they know they will have to fight you for your personal assets, which is difficult. If you have a massive policy, they see the insurance company as a big, easy target. A higher limit can paradoxically make you a more attractive target, leading to a faster settlement paid by your insurer, protecting your own assets.
Why your good intention of being “honest” with an adjuster can actually hurt your claim.
The Honesty and the Unnecessary Harm
After my accident, I wanted to be completely honest with the other driver’s insurance adjuster. I told him every detail, including that I had been feeling a little tired that day. My good intention was used as a weapon against me. The adjuster used my “admission” of being tired to argue that I was partially at fault for the accident, and they dramatically reduced my settlement offer. I learned that in a claim, you should never volunteer information. Be truthful in your answers to their specific questions, but do not offer any extra details.
Quit using your credit card’s rental car insurance. It’s not worth the gaps.
The Card and the Coverage Chasm
I always used to decline the rental car company’s insurance, thinking my premium credit card had me covered. It’s not worth the risk. My credit card’s coverage was “secondary,” meaning I had to file a claim with my own personal auto insurance first. It didn’t cover “loss of use”—the money the rental company charged me for the days the car was being repaired. And it provided no liability coverage at all. Those gaps are massive. The few dollars you save by using your credit card’s coverage is not worth the potential for a huge, uncovered loss.
The metric everyone tracks (their deductible) that means absolutely nothing compared to the policy’s exclusions.
The Deductible and the Denial
People are often obsessed with their insurance deductible. They will shop around to save a few hundred dollars on it. This is a vanity metric. It means absolutely nothing if the policy has a broad exclusion for the type of claim you have. I would rather have a policy with a $5,000 deductible that actually covers my risks, than a policy with a $500 deductible that has a gaping exclusion that leads to a complete denial of my $50,000 claim. The exclusions page is infinitely more important than the deductible amount.
Stop calling it a “premium.” Call it your “consideration for a contractual promise.”
The Premium and the Power of Precise Language
I used to think of my insurance payment as a “premium.” It felt like just another bill. I changed my language. Now, I call it my “consideration.” In contract law, “consideration” is the value you give in exchange for a promise from the other party. Thinking of it this way is a powerful mental shift. I am not just “paying a premium.” I am “providing the consideration” that legally binds the insurance company to their contractual promise to protect me. It reminds me that this is a legal transaction where I have rights.
The decision I made to read my entire policy that everyone said was a waste of time (but saved me $50,00.
The Policy and the Payout
When my homeowner’s insurance policy arrived, it was a 100-page booklet of dense legal language. My friends and family told me I was crazy for wanting to read it. “Nobody reads that!” they said. I did it anyway. It took me a few hours, but I found a small clause that provided extra coverage for “debris removal” after a major storm. When we had a storm, the adjuster’s initial offer didn’t include that cost. Because I had read my policy, I knew I was entitled to it. That one clause got me an extra $50,000.
What I learned from a denied claim that changed everything about how I buy insurance.
The Denial and the Due Diligence
My first major insurance claim was denied. It was a painful, expensive, and deeply educational experience. It taught me that an insurance policy is not a promise of friendship; it is a legally binding contract that is written by an army of lawyers to favor the company. That one denied claim changed everything about how I buy insurance. I now read every word. I ask aggressive questions. I work with an independent broker who works for me, not the company. I treat it like the serious financial negotiation it is.
The common mistake of assuming your policy covers sewer backup that’s costing homeowners thousands.
The Sewer and the Surprise Exclusion
A clog in the city sewer line caused raw sewage to back up into my finished basement, causing tens of thousands of dollars in damage. I was horrified to learn that my standard homeowner’s policy did not cover it. There is a specific, and very common, exclusion for any damage caused by “water which backs up through sewers or drains.” To be covered, I needed to have purchased a separate, inexpensive “sewer backup” endorsement. It’s a common mistake that costs homeowners a fortune, and most people don’t know the gap exists until it’s too late.
PSA: Pet insurance “wellness plans” are a scam. Here’s proof.
The Wellness Plan and the Woeful Math
Here’s a public service announcement: the “wellness plans” offered by most pet insurance companies are a scam. These plans, which cover routine things like check-ups and vaccinations, are not actually insurance. They are just a pre-payment plan. I did the math. The total annual premium for the wellness plan was actually more than the cost of just paying for all the covered services out-of-pocket myself. You are better off putting that money in a savings account. It’s a plan with a guaranteed negative return on your investment.
The skill of critical thinking that insurance marketers hope you don’t have.
The Slogan and the Skepticism
Insurance companies spend billions on marketing designed to make you feel safe and secure. Their slogans are about trust, friendship, and being a good neighbor. The most important skill a consumer can have is critical thinking. You must have the ability to separate the emotional appeal of the marketing from the cold, hard reality of the legal contract you are buying. They are hoping you will be swayed by the cute mascot. A critical thinker ignores the mascot and reads the exclusions page.
This 5-minute action of checking your policy for an “anti-concurrent causation” clause beats trusting your agent every time.
The Clause and the Coverage Collapse
After a hurricane, the wind damaged my roof, and then storm surge flooded my house. The wind was covered, the flood was not. A legal doctrine called “concurrent causation” might have helped me. But my policy had a specific “anti-concurrent causation” clause. This clause, which is now common, says that if a loss is caused by both a covered peril (wind) and an excluded peril (flood), the entire loss is excluded. Taking five minutes to search your policy for this one clause will tell you more about your real-world coverage than any conversation with your agent.
Why that cute mascot has nothing to do with how your claim will be handled.
The Gecko and the Grievance
You see the cute gecko, the funny commercials, the friendly slogan. You choose an insurance company because their marketing makes you feel good. Then you have a claim. You are not dealing with the gecko; you are dealing with a claims department whose employees are judged and bonused based on how little money they pay out. The cute mascot is a multi-billion dollar advertising strategy designed to distract you from the fundamental, adversarial nature of the claims process. Your claim will be handled based on the contract and their bottom line, not by a cartoon animal.
Stop waiting for a renewal to review your coverage. Start with a major life event.
The Renewal and the Risk of Not Reviewing
Most people only think about their insurance once a year at renewal time. This is a mistake. Your life changes more often than that. You should be reviewing your coverage after any major life event: getting married, having a child, buying a new house, or getting a major promotion. These events dramatically change your risk profile and your insurance needs. Waiting for your annual renewal to adjust your coverage means you are likely spending months being dangerously underinsured after a major life change.
The insurance term (subrogation) I learned that most people have never heard of.
The Subrogation and the Surprise Lawsuit
My neighbor’s faulty wiring caused a fire that damaged my house. My insurance company paid for my repairs, and I thought it was over. Then I learned about “subrogation.” Subrogation is the right of my insurance company to step into my shoes and sue my neighbor to recover the money they paid me. I was shocked to learn that my own insurance company was now suing my neighbor on my behalf. It’s a term most people have never heard of, but it’s a fundamental part of how the insurance world really works.
Your problem exists because you believe that insurance is a product, not a contract.
The Product and the Promise
You are having a problem with your insurance because of a fundamental misunderstanding. You believe you have purchased a “product,” like a car or a television. You have not. You have entered into a complex legal contract. A product has features and benefits. A contract has duties, conditions, and exclusions. When you stop thinking of yourself as a consumer of a product and start thinking of yourself as one party in a legal contract, your entire approach to the relationship will change. You will become a more empowered, educated, and effective advocate for your own rights.
Delete that insurer’s “drive safe” app. The data they collect will be used against you.
The App and the All-Seeing Eye
Your insurance company offers you a discount for using their “drive safe” app that monitors your driving habits. It seems like a great deal. It’s a trap. You are giving the insurance company a massive amount of data on your every move. They can see when you drive, where you drive, how fast you drive, and how hard you brake. They will absolutely use this data against you to raise your rates or to assign you partial fault in an accident claim. The small discount is not worth the massive invasion of your privacy.
The advice on umbrella policies I give that makes agents uncomfortable (but is true).
The Umbrella and the Uninsured Motorist Crisis
Here’s a piece of advice on umbrella policies that makes most agents uncomfortable. I tell people that the most important part of their umbrella policy isn’t the liability coverage; it’s the “uninsured/underinsured motorist” (UM/UIM) coverage. Why? Because you are far more likely to be seriously injured by a person with no insurance than you are to cause a multi-million dollar accident yourself. A standard umbrella won’t cover your own injuries from an uninsured driver. You need a specific umbrella policy that includes high-limit UM/UIM coverage. It’s the coverage that protects you from the other guy.
Why the common fear of being “insurance poor” is irrational and the real fear of being one lawsuit away from bankruptcy is ignored.
The Premium and the Precipice
People often worry about being “insurance poor”—spending too much on insurance premiums. This is an irrational fear. The premium is a known, manageable expense. The real, rational fear that people should have is the fear of being one single lawsuit away from personal bankruptcy. The cost of defending a major lawsuit, even one you win, can be financially devastating. Fearing the small, predictable cost of a premium while ignoring the catastrophic, unpredictable risk of a lawsuit is a classic failure to see the bigger picture.
I tried to rely on my HOA’s master policy so you don’t have to. Here’s what happened.
The Master and the Massive Deductible
I lived in a condo and I thought my HOA’s “master” insurance policy covered everything. I was wrong. A pipe burst inside my unit’s wall, causing major damage. The HOA’s policy had a massive, $25,000 deductible, and the HOA board passed that cost directly on to me. I was on the hook for the entire amount. I learned that an HOA master policy is designed to protect the association, not the individual unit owner. You must have your own, separate condo owner’s policy to cover the deductible and your own personal property.
The question about “admitted vs. non-admitted” carriers that instantly reveals if an agent knows what they’re doing.
The Question That Vets the Pro
When I’m interviewing a new insurance agent, I ask them this simple question: “Can you explain the difference between an ‘admitted’ and a ‘non-admitted’ insurance carrier?” A real professional will immediately be able to explain that an admitted carrier is licensed by the state and backed by the state’s guarantee fund, while a non-admitted carrier is not. They will also be able to explain the pros (flexibility) and cons (lack of guarantee) of using a non-admitted carrier for a hard-to-place risk. An amateur will just give you a blank stare.
This old-school method of reading the fine print beats every marketing slogan.
The Print and the Promise
Insurance companies spend billions on marketing slogans that promise you peace of mind. “You’re in good hands.” “Like a good neighbor.” This is all emotional fluff. I use an old-school method that beats every slogan: I actually read the fine print. The true promise of the insurance company is not in their slogan; it is in the detailed, and often dense, language of the policy contract. The thirty minutes you spend reading the actual terms and exclusions will give you a much more realistic picture of your protection than a lifetime of watching their commercials.
Stop romanticizing brand loyalty. It’s actually costing you hundreds a year.
The Loyalty and the Lost Savings
I was a loyal customer of one insurance company for my entire adult life. I thought my loyalty was being rewarded. It was a romantic notion that was costing me a fortune. When I finally decided to shop my policies with an independent broker, I was shocked. I found I could get the exact same coverage from a different, high-quality company for hundreds of dollars less per year. I learned that brand loyalty in insurance is a one-way street. The company will happily take your money, but they won’t reward you for not checking their competitors.
The principle of “utmost good faith” that insurance companies are supposed to follow but often don’t.
The Good Faith and the Bad Behavior
Insurance law is based on a principle called “utmost good faith,” which means both parties are held to a high standard of honesty. But let’s be real. Insurance companies often violate this principle. They will use deceptive language, they will unreasonably delay claims, and they will look for any excuse to deny coverage. While you are required to be completely honest with them, you should not expect the same in return. You should treat the relationship as an adversarial one, and you should be prepared to fight for the rights you are owed under the contract.
Why your J.D. Power rating is vanity and the state’s complaint ratio is sanity.
The Rating and the Reality
Insurance companies love to advertise their high J.D. Power ratings for “customer satisfaction.” This is a vanity metric. A much more important and revealing number is the company’s “complaint ratio,” published by your state’s Department of Insurance. This ratio shows how many complaints the company has received relative to its size. A company might have a great J.D. Power rating, but a terrible complaint ratio. This tells you that while their sales process might be friendly, their claims process is a nightmare. The complaint ratio is the number that reflects reality.
Forget peace of mind. Aim for contractual certainty instead.
The Feeling vs. The Fact
Insurance is often sold as a way to get “peace of mind.” But that’s a vague, emotional feeling. A much better goal is to aim for “contractual certainty.” This means that you have read and understood your policy, you know exactly what is covered and what is excluded, and you have a clear understanding of your rights and duties under the contract. Peace of mind can be an illusion. Contractual certainty is a fact. It’s the real, tangible result of being an educated and proactive insurance consumer.
The realization that made me quit believing that insurance is simple.
The Simplicity and the Shocking Reality
I used to believe that insurance was a simple product. You pay your premium, and they cover you if something bad happens. My first major claim was a brutal realization that I was wrong. I was suddenly drowning in a world of deductibles, exclusions, sub-limits, and complex legal language. I realized that insurance is not simple at all. It is a complex legal and financial product designed by experts to be confusing. The moment I quit believing it was simple was the moment I started to take my own education about it seriously.
What amateurs do (buy online) that pros never do for complex risks.
The Click and the Complexity
An amateur with a simple need, like basic auto insurance, can probably buy a decent policy online with a few clicks. But a professional—a business owner, a high-net-worth individual—with complex risks would never do this. A pro knows that their unique risks cannot be captured in a simple online form. They need the advice, the market access, and the advocacy of a professional, independent insurance broker. They know that for a complex problem, you need a human expert, not a website.
The investment in a few hours to read your policy that everyone avoids that has the highest ROI.
The Time and the Tens of Thousands
Most people would rather do anything than spend a few hours reading their insurance policy. They see it as a waste of time. It is the single highest ROI investment you can make. I once spent two hours reading my policy and discovered a small provision for “ordinance or law” coverage that I didn’t know I had. A year later, that one provision paid out an extra $50,000 on a claim. I “earned” $25,000 an hour for my reading time. The small investment of time can pay a massive dividend when you need it most.
Stop saying “I have the best insurance.” Say “I have a contract that covers these specific risks.”
The “Best” and the Better Statement
People love to say, “I have the best insurance.” It’s a meaningless, subjective statement. There is no such thing as the “best” insurance. There is only the insurance that is right for your specific risks. I’ve learned to be more precise. Now I say, “I have a contract that is specifically designed to cover my risks of X, Y, and Z.” This language shows that I understand that insurance is a contract, not a contest, and that I have made an educated choice based on my unique needs, not on a vague notion of “the best.”
The truth about underwriting I couldn’t say as a captive agent.
The Box and the Bad Fit
I used to be a “captive” agent, meaning I could only sell insurance for one single company. Here’s the truth I couldn’t say out loud. My job was not to find the best policy for my clients. My job was to find a way to fit my clients into one of my company’s pre-defined “boxes.” If a client had a unique risk that didn’t fit into one of my boxes, I was out of luck. A captive agent’s primary loyalty is to the box, not to the client.
This tiny detail in the definition of “occurrence” separates covered claims from denied ones.
The “Occurrence” and the Ongoing Damage
My homeowner’s policy covered damage from an “occurrence.” I thought that meant a single event. A slow, hidden water leak from a pipe caused mold to grow over several months. The insurer denied my claim, saying the damage wasn’t from a single “occurrence.” I learned that the policy’s definition of that one word was critical. A good policy will define an occurrence to include “a repeated and continuous exposure to the same harmful conditions.” That tiny detail in the definition is the difference between a covered claim and a denied one.
Why a low premium is a trap for people who don’t understand their exposures.
The Premium and the Perilous Gap
A low premium is incredibly tempting. For a person who doesn’t truly understand their own risks, it’s a dangerous trap. A low premium is almost always a sign that the policy has low limits, high deductibles, or, most importantly, major exclusions. You might be saving $20 a month on your auto insurance, but the policy might have no rental car coverage and dangerously low liability limits. The low premium is not a good deal; it is a direct reflection of a perilous gap between the coverage you have and the coverage you actually need.
Replace your complicated assumptions with a simple question to your broker: “Show me in the policy where it says that.”
The Assumption and the “Show Me”
I used to have long, complicated conversations with my insurance agent where I would make all sorts of assumptions about my coverage. I replaced all of that with one simple, powerful question: “Show me in the policy where it says that.” If he tells me I’m covered for something, I politely ask him to send me the specific page and paragraph from the contract. This question cuts through all the sales talk and all the assumptions. It forces the conversation to be based on the only thing that matters: the written words in the legal document.
The skill of asking “what if” that’s 10x more valuable than asking “how much.”
The “What If” and the Wider View
Most people, when buying insurance, only ask one question: “How much does it cost?” The skill that is ten times more valuable is the skill of asking “what if?” What if I get in an accident with an uninsured driver? What if a guest is injured in my home? What if a fire makes my house unlivable for six months? Asking these “what if” questions forces you and your agent to think through real-world scenarios and to build a policy that protects you from life’s actual risks, not just to find the cheapest price.
Stop treating insurance like a purchase. Treat it like a legal negotiation instead.
The Purchase and the Power Dynamic
Most people treat buying insurance like buying a toaster. They are a consumer making a simple purchase. This is the wrong mindset. You should treat it like a legal negotiation. The insurance company has a team of lawyers who have written the contract to be in their favor. You have the right to negotiate the terms of that contract through endorsements, to question its language, and to demand clarity. The moment you stop acting like a passive consumer and start acting like one party in a legal negotiation, the entire power dynamic shifts in your favor.
The experiment I ran of quoting my policies with an independent broker that proved my “loyalty discount” was a myth.
The Loyalty and the Lie
I had been with my “loyal” insurance company for 15 years. They gave me a “loyalty discount” every year. I decided to run an experiment. I called an independent broker and asked him to quote my coverage with other carriers. He came back with a quote from a different, A-rated company that was 25% cheaper for the exact same coverage. My experiment proved that the “loyalty discount” was a complete myth. It was just a marketing tool designed to keep me from shopping around and discovering how much I was actually overpaying.
Why your old belief about insurance worked before but doesn’t in our litigious society.
The Handshake and the Hard-Nosed Lawsuit
Thirty years ago, a minor car accident was often settled with a handshake and a promise to pay for the repairs. That world is gone. We now live in an incredibly litigious society. That same minor accident is now likely to result in a lawsuit for bodily injury, lost wages, and emotional distress. The old belief that a basic, minimum-limits insurance policy is “good enough” is dangerously outdated. In today’s world, you need massive liability limits to protect yourself from the reality of how easily a small incident can turn into a major lawsuit.
The choice to buy more liability coverage that everyone judges that actually makes financial sense.
The Limit and the Lawyer’s Motivation
My friends judged me for buying a massive, multi-million dollar umbrella liability policy. They said it was overkill. It’s actually a sound financial decision. Here’s why. A plaintiff’s attorney is motivated by the potential for a big payday. If you only have a small policy, they know they will have to fight you for your personal assets. If you have a massive policy, they see the insurance company as a big, easy target. A high limit makes you an attractive target for a settlement that the insurance company pays, which is the best way to protect your own money.
I stopped trusting the ads and our family’s financial security improved.
The Ad and the Act of Reading
I used to be swayed by insurance company advertising. I would choose the company with the funniest commercials or the catchiest slogan. I stopped. I decided to start trusting the actual policy documents instead. I spent a weekend reading our home and auto policies from front to back. I discovered massive gaps in our coverage that I never knew existed. I switched to a company with boring ads but a much better policy contract. Our family’s real financial security improved dramatically the moment I started trusting the legal document, not the television commercial.
The concept of “indemnity” that nobody understands but is the entire point of insurance.
The Promise to Make You Whole
The most important concept in all of insurance is “indemnity,” and almost nobody understands it. It’s a simple idea: the purpose of the insurance policy is to restore you to the same financial position you were in the moment before the loss occurred—no better, no worse. It’s not a lottery ticket. It’s not a new-for-old replacement plan (unless you specifically have that coverage). It is a promise to make you whole. Understanding this one, fundamental concept will help you to have realistic expectations and a much more productive claims experience.
This unpopular opinion on life insurance as an investment will trigger financial gurus but it’s true.
The “Investment” and the Inefficient Returns
Financial gurus will tell you to “buy term and invest the rest.” Here’s an unpopular opinion: for high-net-worth individuals, a properly structured permanent life insurance policy can be a phenomenal investment. The cash value grows in a tax-deferred environment. You can borrow against it tax-free. And the death benefit is paid out tax-free. It is a unique asset class with tax advantages that cannot be replicated by traditional investments. While it’s not for everyone, for the right person, it is a powerful and often misunderstood wealth accumulation tool.
Stop copying your parents’ insurance choices. Do your own risk analysis instead.
The Parents and the Outdated Plan
When I first moved out on my own, I just called my parents’ insurance agent and bought the same policies they had. It was easy. It was also a mistake. My parents lived in a different state, had different assets, and a completely different risk profile. Their insurance plan was not designed for my life. I learned that I needed to do my own, personal risk analysis. I had to think about my own risks and my own needs, not just blindly copy the outdated plan of a previous generation.
The mistake of ignoring your Uninsured Motorist limits I see everywhere that’s so easy to fix.
The UM and the Ultimate Mistake
I see this mistake everywhere, even with wealthy people. They will have a massive, multi-million dollar umbrella policy to protect them if they cause an accident, but they will have low, state-minimum limits for Uninsured/Underinsured Motorist (UM/UIM) coverage. This is insane. You are far more likely to be seriously injured by a person with little or no insurance than you are to cause a catastrophic accident yourself. Your umbrella will not protect you from them. Maxing out your UM/UIM limits is the single most important and easiest thing you can do on your auto policy.
Why this new “AI underwriter” isn’t innovative. It’s just redlining repackaged.
The AI and the Unseen Bias
A new “insurtech” company is promoting its “AI underwriter” as a fair and unbiased way to set insurance rates. It’s not innovative; it’s just a new, high-tech way to “redline.” The AI algorithm is trained on historical data, and that data is full of the same old societal biases. The AI learns that certain zip codes or certain demographic factors are associated with higher risk. It then uses those proxy factors to charge people more. It’s the same old discrimination, just repackaged in a “neutral” algorithm that nobody can question.
The rule I break consistently (I question everything my agent says) and why you should too.
The Question and the Quest for Clarity
I have one simple rule in my relationship with my insurance agent: I question everything. If he tells me something is “covered,” I ask him to show me where in the policy. If he tells me a premium increase is “normal,” I ask him to show me the data. I am not doing this to be difficult. I am doing it because my own financial security is my responsibility. This consistent habit of questioning everything has made me a much more educated consumer and has led to a much more transparent and honest relationship with my advisor.
Stop believing insurance is there to “help people.” Believe it’s a business designed to make a profit from calculated risks.
The “Help” and the Hard Reality
The advertising wants you to believe that insurance companies are there to “help people” in their time of need. Stop believing that. It is a business, and it is a business designed to do one thing: to make a profit for its shareholders. They do this by taking in more in premiums than they pay out in claims. They are not a charity. They are a for-profit corporation that has entered into a legal contract with you. The sooner you accept this hard reality, the sooner you will become a more effective advocate for your own contractual rights.