“Doctor, thank you for meeting me; this is what you should do to treat and cure me properly. “Can you imagine this scenario? Can you imagine paying a doctor and that the doctor expects you to order what is needed for you to become Cured? Of course not.
But in the world of insurance buying, this is what many insurance agents say that their duty is to their customers – to get paid to only take orders to be properly insured. It is really illogical and against public order that the law actually allows this scenario to continue in many states when the insurance industry recognizes how important and complex the purchase of insurance is.
A new study commission of the insurance industry̵7;s lobby arm, the American Property Casualty Insurance Associationpublished a study indicating that most policyholders are probably underinsured and warns of the consequences:
A new APCIA / Harris Poll survey reveals that a majority of insured homeowners across the country have not taken important steps to ensure that their insurance coverage keeps pace with rising inflation, including rising construction costs and potential rebuilding delays due to labor or material shortages , which can leave policyholders underinsured if the disaster occurs.
How about insurance companies and insurance agents raise the issue with their customers. Co-insurance issues, questions about compliance by mortgage borrowers and underinsurance issues exist. This is not a situation of “it may happen in the future.” Instead, construction costs have increased, and if there has been no increase in insurance with the right value insured, every policyholder is now underinsured.
The study repeats for insurance companies that they sell a product that the majority of their customers do not understand. They also know that a large majority are underinsured. The insurance industry needs some leadership and responsibility to take matters into their own hands and do something about it.
What will it do? Should insurance companies be allowed to apply co-insurance regulations with the knowledge that their insured are underinsured? Many reinsurance contracts are based on the good faith that requires primary insurance guarantees to be value-insured. It simply does not happen now. Should reinsurers accept that their primary insurer does not take out insurance which is a concern?
Inflation has many terrible consequences. Widespread underinsurance of property values is one of them.
Policyholders should call their insurance agents to make sure they have enough insurance. They should ask what types of guaranteed replacement costs are available.
Inflation is as violent as a robber, as frightening as an armed robber and as deadly as a murderer.