“Why did my premium go up? I have had this insurance for ‘x’ number of years and I have never put in a claim!” I cannot tell you how many times I have heard this question/complaint over the years from one of our customers or even from a prospect shopping for new insurance (because their price went up). Their argument is that the insurance has never been “used”, so it is not fair that the premiums go up.
While I know that no one wants to pay any more for insurance than they have to, and I want to be sympathetic to their concerns, I always have the same response when posed with this question/complaint. I always tell them, that from my perspective, even though they have never submitted a claim, they are using their insurance every day. While paying a claim is obviously important if the time comes, it is just as important to know that you are protected every single day, whether you have a claim or not. Not only does the money you spend on insurance “buy” you payment for claims, but it also “buys” you peace of mind knowing that you have protection for the unfortunate time when you may need to use it. In my opinion, the insurance companies earn their premiums by providing this peace of mind to their clients which allows them to live their lives every day without worrying about what would happen if their house burned down or they injured someone with their car and they didn’t have insurance.
Obviously insurance is a numbers game and the idea is that the premiums paid by many, go to pay the claims of a few. Although that is true, you have no idea how grateful those few have been when they receive a $300,000 check when their house has burned down, or had their large legal bills taken care of when they hit a pedestrian with their car. You never know what can happen, and when you might become one of those few.
For those that have never had a claim, knock on wood and keep your fingers crossed! I hope that you never have to get “your money’s worth” out of the claims side of insurance. However, I hope that my comments above have given you a little different perspective on the value of your insurance. I know that I have a lot fewer worries in my life knowing that I am using my insurance every day to provide me with peace of mind.