What insurance is missing

Transparency. That’s what insurance is missing. Do you know exactly why your premium went up? I don’t, and I’m in the business. I know about general rate increases, and I know about the increase to my dwelling coverage every year as a function of inflation, but I have zero way of knowing or accounting for exactly why my premium went up the way that it did. And I can’t know for any of my clients, either. I find that irritating.

Somewhere there’s a computer that knows. It took the inputs it was supposed to, it performed the function it was programmed to, and it spit out a premium as a result. So where is that report about me and why can’t I see it?

My beef isn’t that I don’t think insurance premiums should go up, because I think that they should. I’ve seen the data and I get it. But I don’t buy the “trust me, we know what we’re doing” argument, and I don’t buy the “it’s proprietary” argument, and I don’t buy the “it’s too complicated” argument as to why/how those rates are calculated for my family.

I want to participate in the relationship I have with companies that provide me my important financial instruments. I expect it of my banking, of my investment advice, of my tax preparation, of my mortgage, and of my insurance/resilience financing. My interest is not to stand in judgement, it’s to understand the specific components of what I get in exchange for what I pay and then use that knowledge to contribute to mutual betterment. Can I behave differently to reduce my exposure and thus reduce the pressure on the insurance company, thereby contributing to lower premiums for me and the collective? Can I take an action today that will re-categorize me in a better light for rating or coverage eligibility? Which side of the relationship wouldn’t benefit from a shared understanding?

I see the current injustice as an imbalance of knowledge. Those who have it control it and don’t share it, when sharing it might give those on the consuming end of the relationship some opportunity to affect outcomes. Insurance companies that dole out passive advice about how to reduce losses are not as noble as those who might share more of the full story and give people like us something to do about it. Democratizing knowledge inspires behavior. Hoarding it does not.