A few days ago I received a letter from my insurance company. Due to the fact that I had two claims on my house in thirteen years of paying large premiums for auto, house, and life insurance, they have decided to “drop” me. My local agent, who I now realize has little power beyond selling and maintaining my policies, has always been wonderful. He is now only able to challenge the decision made by the underwriters in the regional office, a process that has an unknown outcome.
Of course this is outrageous and probably not particularly logical on the part of the insurance company. If they’ve payed off a few thousand dollars, they’ve gained far more than that from my premiums all these years. That pattern is the basis of the insurance industry: people pay for the unlikely possibility that they will make a claim.
What has caused this? Our economy, which is unstable at best, has created the perception that corporations have to be proactive about saving money. In the predatory world of corporate politics, the first impulse is to demonstrate savings.. It makes no difference that the company is making a profit overall; that would imply that all areas of the company knew what the other areas are doing. Anyone who has worked for a large corporation knows that various departments are siloed, sometimes wasting large amounts of money with no oversight from the company as a whole. If underwriters are told by their boss in one regional office that they have to stem the tide of insurance payouts, they will find a list of customers who fit the bill simply to justify their existence. It’s the way of American business.
So is this blog about disappointment really about insurance? Not quite. A few years ago my credit rating went down 100 points in one day. No, I hadn’t defaulted on a loan. A large, well-known, bank had taken one of my wife’s credit cards and made me the prime card holder. We never held the card in common. It was purely her’s. When I spoke to the bank, I began by speaking to their fraud department. As amazing as it may seem, the fraud department admitted that their actions were fraudulent. However the credit card department was like ice. I was told that a settlement had been made to pay off the balance on the card and “no adjustments” could be made under those circumstances. When I reminded them they had committed fraud which transcended the sanctity of their payment plan, they were unmoved and unconcerned.
So what is this blog about? Disappointment. Disappointment that the “insurance” I have is not insurance. Disappointed that a large bank with a reputation that spans one hundred years is able to blithely break the law and then defend the practice. What we have, with growing frequency, are criminals and criminal activity masquerading as critical financial services.
We can only expect this to continue. Recently I saw a new report describing how banks are now using tricks to add overdraft fees to customer’s accounts. What is most pitiful is that no one seems to be outraged by what are clearly criminal activities. That our service organizations have happily become white collar criminals does nothing to anger us. There contract with us, their customers, has been voided and we have become their prey.
This is the trend in our country. Remember that the last recession was due to irresponsible credit dealings and financial institutions cooking the books. I suppose that the philosophy in the financial industry, after seeing the “successes” of those corporations, must now be “nice guys finish last”.
This isn’t about corporate Americas a whole. These are the people who provide our basic financial foundation. If they start acting flakey or dishonest then our lives become equally shakey. For me, I now have the dilemma of possibly retaining my insurance (if they let me) and then being afraid to make another claim. This means that I essentially could have no insurance. If you consider my experience with that large bank regarding my wife’s credit card, things become a little more dangerous, as my credit rating is destroyed. I can only imagine that there are people who have had their financial status ruined completely by these criminal actions. All of us are vulnerable.
What could change this? I’m afraid it would involve a lot of energy from people who’ve been negatively affected. We would need nothing short of an enormous class action suit would to make a dent in this problem, something that would involve more energy and money than most of us have.