In 1995, the average yearly insurance premium was $418 per year. Today the average is $1,784. That means that for 28 years you will, on average, pay $30,828 in premiums. The average insurance claim in America currently is $13,962.
Statistics are what they are but they also provide a sample of what can be expected in the insurance world. A mortgage company would never let you purchase a home without insurance because, unless you are able to rebuild it out of pocket, you would default on the loan they give you should something catestrophic happen.
I had another sweet elderly client that explained to me that they had not filed a claim in the 50 plus years they had their insurance, but when they finally did for 3" hail that demolished their roof she could not fathom why the carrier denied their claim. I gently explain it like this: The insurance company sees you like the farmer sees his chickens. The day you stop paying premiums and laying those golden eggs and start filing claims is the day your head is chopped off and you go in the pot. There is no love for the insured, and no loyalty either. They are not like a good neighbor, being there for you when you need them the most, but you are not required to be loyal to them either. They do, however, appreciate your premiums, which is what they will use to puchase skyscrapers in the downtown metro areas, and of course, pay themselves large corporate bonuses.
Sometimes I wonder if a large savings account would be better.
