Three reasons why people don't buy home insurance
Three reasons why people don't buy home insurance
I recently learned of two different times when families lost everything when their home was on fire. These are tragic losses and fortunately the only things lost were consumables. No one was injured, but they woke up the next day with nothing but clothes on their backs and no home to return to.The real tragedy of these situations is that they don't seem to have insurance for their properties. This means that instead of taking a hotel room, they look for a place to stay with friends and family until they find something else. Instead of going shopping for a few essentials when things are starting well, they should ask for donations and kindness from friends, family and strangers for most of their lives. Rather than working with contractors to remove rubble and begin rebuilding, all that's left is worthless land with a house shell on it.
Considering the situation in which this choice has led them, one would think that people would consider not buying insurance. Here are three reasons why people don't buy home insurance when they don't have to.
It can get expensive.
I understand. Insurance is not cheap. This obviously also depends on several factors. I live in Florida which is probably one of the most expensive states in the United States for insurance. That doesn't make it any less valuable, especially when you come home and your house is on fire.The cost of home insurance depends on several factors. The first three are related. The size, type of construction and the cost of rebuilding the house. This should make sense, but the larger the house, the more expensive it will be to replace it. It just takes more materials and time to rebuild. It also makes sense that different building materials cost more. Contractor quality materials are cheaper than higher quality materials. Wood costs less than the block.
The costs also depend on the location of the house. This is true in different ways. Costs for building materials and labor vary from city to city or state to state. Some property estimation tools have data up to the postcode for material and labor price differences. It can also change if the loss is related to a catastrophic event, such as a hurricane or fire.
The cost of location-based insurance also means that some locations are more expensive to insure due to the risk of damage from various causes of loss covered. Florida residents pay more for hurricane and flood insurance. Meanwhile, the risk of fires in California certainly affects insurance costs. Places particularly at risk (due to various causes of leakage) include barrier islands, coastal areas, fire areas, lowlands and low altitudes near water bodies.
Nobody is forcing them to do it.
There are people who wouldn't buy insurance if they felt they could get away with it. Don't you think so? Refer to the introduction and your instructions. I suppose you know at least one person or family who lost everything in a fire and had no insurance. Still not convinced? What about the uninsured motorist at your home? In Florida, it is estimated that about 1 in 4 drivers are uninsured and that does not account for other drivers who only purchase minimal insurance.
When it is not necessary to purchase insurance, many people will choose to avoid the monthly costs and do without it. The only time coverage is needed is when a mortgage is in place. With that in mind, it occurs to me that people look at home insurance with two parallel thoughts guiding their decision not to buy it.- Nothing serious has happened so far and I do not know of anyone who has suffered significant losses that the insurance would cover. The people I know who have suffered a loss have had so much trouble with their insurance company that it's not really worth paying.
- I could use this money for other things my family needs: paying for a car, car insurance, food, clothes, etc.
The reputation of the insurance industry.
The insurance industry doesn't have the best reputation when it comes to keeping every customer happy. It goes back to the complexity of insurance and how people sometimes think that a loss should be covered and that it is not. Nor does it help that insurers sometimes act badly, incorrectly and sometimes illegally.Read also: 3 Reasons Why Thanksgiving Dinner Is Better Than Insurance Policy
Special thanks go to the groups responsible for the terrible reputation of the insurance industry.
- Thanks to the companies who try to discourage their customers from having to stop fighting and pay for the complaint. You know you owe money. We know you owe money. Why not go wrong serving and have it all sorted out later? Companies would tell us that they just want to pay what they owe and that they have to work hard to prevent fraud. I wonder what it would be like if companies were a bit more liberal in repaying loans. Could this lessen the fraud that worries them so much?
- Thanks to the coverage, lawyers on their expensive billboards and TV commercials are shouting that insurance companies want to defraud their customers. All this while cashing in the big checks (their share of the big payout) so they can pay for their home, car, and boat. My question is, how much of the extra money they get for the "customer" goes back into their pockets instead of getting more money from the customer?
- Thanks also to the public reviewers who seem to believe that all insurance companies are defrauding their customers. I know you can show me file after file where this would have happened, including many where this is actually true. I also know that not all of your files are complaint files and most complaints are resolved in a way that makes customers very, if not completely, satisfied.
At the end of the day, while these are reasons not to purchase home insurance, there is a very good reason to purchase home insurance. When a fire breaks out, no one wants to look their family in the eye and wonder what to do next?