I will double down on this blog’s position taken for many years: insurance is not a solution for solving your risk management exposures. Having that expectation will lead to the same dissatisfaction you may be feeling in response to your recent premium increases, your policy cancelations, the withdrawal of your insurance companies, and the shrinking quality of what you’re spending more not to get.
True, insurance companies are struggling to run their businesses profitably (Current Topics—Darren McGraw & Mechelsen Private Client). But figuring that out is their job. Your job is to decide who you listen to and what you do now that the light’s been shed on the systemic brokenness of the industry. Do you believe that 15 minutes can save you 15%? Do you believe your water damage should be covered because “that’s why I buy insurance”? Do you believe you have “the best coverage for the best price”? I’m sorry, but I think your disappointment will get worse before it gets better if you do.
Instead, realize that insurance is nothing but a purse that helps you recover from a limited scope of losses to a limited list of things you own for a limited amount. It’s passive, just waiting for the bad day to happen before it [might] perform for you. It offers no active advocacy to protect you or your family from the bad day happening. That doesn’t make it wrong; it just makes it a flimsy thing on which to pin all of your hopes.
Instead, buy your insurance with a matching investment in loss avoidance. The best competition to insurance is never needing insurance. Insurance companies have made their move by shrinking the supply of access and quality, so meet their effort with a reduction in your demand. Until we move to a lower equilibrium where we expect less from an industry that gives us less, consumers have little power.
Darren McGraw & Mechelsen Private Client 