Saturday, Jan 19, 2008 at 22:24
Axle, an insurance broker is most definately NOT an insurance company :)
As a qualified AAII I can state that insurance is designed for the cost of a disaster to be spread across many people, and the affected person should be restored to the condition they were in prior to the disaster, or event. There is obviously administration involved, the cost of which needs to be spread as
well.
The purpose of insurance is not to improve someone's position after an event, although this is a commonly held belief. In many cases people are better off (new for old) because the cost of manufactured goods continues to fall and wages continue to rise, making repairs uneconomical compared to replacement with new.
Once the insured has been paid or otherwise restored to their previous situation, the subject damaged goods become the property of the Insurance company, not the insured, and this is quite correct. Then the company has the right to sell it, just as you have the right to sell your own property.
Insurance companies also have to contend with extensive fraud which in the end just costs honest people more for their premiums. The occasional few get caught and jailed, but most get away with it.
Are all companies honest? - I'm neither defending nor attacking, just outlining the principles of Insurance as briefly as I can :)
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