I think as a society we have lost faith in insurers. I don’t know many people who still believe that an insurer, any insurer, will be forthcoming with benefits or reimbursement at the time of claim. I see many people, before claiming, actually weighing the pros and cons between the monies they should be entitled to and possible insurer delay, deny, mistreatment, and likely future rate increases.
My parents have some epic insurance examples in the world of travel. Once, the place at which they were booked to stay went bankrupt. They requested reimbursement through their travel insurance. Surprise! It does not cover bankruptcy, only if the place became unsafe for occupancy. So my mom said to them “it is unsafe for her to vacation at a place that is bankrupt”. In another instance, extensive flooding caused the vacation destination to cancel the trip. So, they again turned to cancellation insurance. Surprise! Their trip cancellation insurance did not cover trips being cancelled. What?
I work in the world of insurance and I can tell you that there are still a wonderful number of insurers that really try to make the application and claims process as painless as possible. After all, most of the people I see are in enough pain already and plenty of insurers get that. Then, there are the ones that don’t. Those are the insurers that have been jaded through poor training, company culture, talk at the water-cooler, or the one too many surveillance videos that caught someone being fraudulent. I often wonder if some insurers are trained to make the process of claiming so difficult so that people eventually just give up and move on.
My solution to the perils of insurance is for people to start shopping for insurance based on feedback from people who have claimed, and not just on who offers the cheapest price. Like most things, you will get what you pay for and cheaping out on insurance can result in crappy treatment at the time of claim. And what happens when people are treated crappy? They turn to the legal profession, and guess what? This costs the insurers more. In all insurance, especially auto, insurers need to exercise good faith, respect, understanding and compassion and this will go a long way in creating a more sustainable product.