Of Greed and the Insurance Industry

[Jesus said], 21 “For it is from within, out of a person’s heart, that evil thoughts come—sexual immorality, theft, murder,22 adultery, greed, malice, deceit, lewdness, envy, slander, arrogance and folly. 23 All these evils come from inside and defile a person.”

–Mark 7.21-23 (NIV)

I am not inclined to write posts like this very often but I cannot remain silent on this issue. My insurance company, Auto Owners Insurance, has raised my insurance premiums for our property approximately 26% over the past two years. That’s right. TWENTY-SIX PERCENT. We have made no claims in this period so why have our premiums sky-rocketed like this? One word: GREED.

Before I go any further I want to emphasize this is not an anti-capitalism rant. I am a capitalist through and through. It has its faults, like the obvious one I am commenting on today, but overall it accomplishes what it is supposed to. I have no problem with people making lots of money legally and ethically. Neither do I have a problem with healthy corporate bottom lines that are earned legally and ethically because that generally means good things for most folks and the economy.

But that is not what is going on here. What is going on here is an industry taking advantage of the fact that it operates in a very restricted market with limited competition to screw consumers. You don’t have to be real smart to see that the recent chain of natural disasters has caused the insurance industry to pay out big bucks. Frankly, that is not the consumer’s fault. It is a fluke of mother nature and it is a given that there are inherent risks for any capitalists.

However, the insurance industry apparently doesn’t see it that way. Instead, they are leveraging their position to recoup losses at the expense of the consumer. They do this because they can. And in doing so, they are essentially telling everyone that they are not willing to accept the risks that are inherent when you insure folks against loss. Sometimes you bite the dog. Sometimes the dog bites you. It’s the nature of the business but the insurance industry gives every indication it is not willing to play by the rules by which most everyone else must play.

And that is where I am rubbed the wrong way about this. The insurance industry knows it has consumers by the short hair. It knows most people need insurance (or it is mandated by law) and so what do insurers do? As an industry it raises our premiums to make up for the increased expenditures they have had to pay out of late. Again, they do it because they can. There is very little competition going on and when that happens consumers always get screwed. Always. The market mechanism simply does not work without competition. This is especially obnoxious given the economic climate in our country. People everywhere are being asked to make sacrifices–except, apparently, the insurance industry.

They aren’t making sacrifices because they do not have to. They will simply raise our insurance premiums.

Every time they raise premiums at a disproportionate rate they are essentially thumbing their collective nose at the rest of us. They are telling us, “Times are tough and you must make sacrifices. You must tighten your belts. But we don’t have to. Why? Because we can collectively raise rates as high as we want to and you will just have to suck it up, baby. We have to watch out for the bottom line and keep our investors happy, you know.”

Even though our options as consumers are limited, I encourage you to start writing your Congressman and Senators to express your dissatisfaction and ask for some relief from this odious practice. Again, I am not advocating socialism. I am calling for economic justice, and without competition the only way that will likely happen is through legislation. Likewise, I encourage you to write to your insurance companies and express your dissatisfaction. I am going to start looking for a new insurer after I do.

Insurance executives need to stop living in la-la land and get a grip on reality. They need to understand that they cannot keep raising premiums at a wicked and uncalled-for rate. It will eventually spell their ruin.

Make your profits, insurance industry. But in doing so understand you also have a social responsibility and screwing already strapped people so that you can recoup your losses simply because you can is not a way to be socially responsible. Be good citizens, not greed-mongers.