83.4% of statasitcs are made up... 30% of the time

Client: “My bill is higher this month?”

Me: “Look: I COULD explain to you why you bill went up , but just take my word for it, rates are trending up right now.”

Client: “But I did not have a claim!”

Me: *SIGH* “Yes, but really you have think of insurance like a pool, you might say sometimes we drink from the pool other times we poor water in. If more people take out then put in, it creates an imbalance. So when more claims are paid then expected, more money is needed to be put in.”

Client: “But I never had a claim!”

ME: “Yes, but you are missing the point. While your rates *are* affected when you have a claim in a much more complicated “predicative model” way where risky factors make individual rates rise while positive factors make rates go down…. Today I am talking about overall trends. When a company spends more on claims then expected and has less earnings on investments than expected overall rates tend to go up. Another example is that state fee. Your rate went up X dollars, y dollars of that is the state fee we have no control over. Its likely the State fund (to pay for no fault medical bills over 300 k) is experiencing a similar imbalance, so the fee goes up.”

Client: “But it always goes up, and my car is worth less if I crash it anyway.”

Me: “Actually, I see it has gone up for you, but in (year) it went down. It just tends to be more noticeable when rates go up, I think. You are right about the value of you car though. Let me put it to you this way: a car policy is like a pie chart, about ½ if it protects the car… the other half protects you, medical, liability, etc etc. out of the ½ that protects your car about 1/3 of that protects things other than collision, about 2/3rds is collision. So if you think about it this way only part is for collision. If you have an accident, only some of the claims are a total loss…. Most of the time it is a door, or a fender. This year the cost of the door may be more to buy and install then last year due to parts and labor prices. So it is possible for your car to be worth less, but cost us more to repair then last year, in a 10 mile an hour crash for example.”

Client: “Its just a racket, I HATE INSURANCE”

Me: *sigh* “I can understand how you might feel that way but consider a world with out insurance, were we all have to take on the burden of our risks with out spreading it over a group of people. It would be too risky to buy a home, or even get financing on a car as what bank would loan you the money if you had no means to recover from say a fire loss or a car collision.”

Client: “Its still a racket, but I will pay it this month I just don’t like paying (less then they waste on coffee per month) more per month.”

Me: “I can help you with that. I will mail you a receipt. Let me know if you have more questions.”

Cleint: “OK thanks.”

*click*

*beep*

Me: “Yessss???”

Front desk: “You have a guy on line two waiting to talk to you about his bill.”

Me *sigh* “OK Yeah.”