Insurer Makes Big Profit On Homeowners InsuranceA.I.G. posted fourth quarter net income of $3.44 billion, even with the fall-out from 2005 claims, according to a New York Times story. Despite $390 million of claims from Hurricane Wilma alone, A.I.G. made almost 8 times as much this year as they did last year.
Now, don't get me wrong. As much as I think insurance can be a racket, and consumers can be the victims, you absolutely want your insurer to be doing well and making a reasonable profit. Why? Because when you file your claim, you want to be sure that your claim will be paid. A financially healthy insurer is your best insurance (all puns intended) that your claim will be honoured.
Insurance is a business after all. If your insurer goes out of business, your claim is worthless.
However, there are a lot of rustlings in the insurance industry about "retaining premiums" and reducing risk. This really means denying claims and getting rid of clients that make claims. Here is where the line between smart business operations and lack of ethics can become very blurry. And it's this blurry line where my concerns lie.
When you research your insurer (and you should), do not just check out their financial rating. You also want to know their consumer track record: whether they have had a lot of complaints and if those complaints were resolved quickly and fairly. To find out this kind of information, you really need to check out your Department of Insurance in the US. If you want this kind of information and you are not in the US, check your local or federal government listings.
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Monique L. Attinger