Is There Something Wrong With How Today’s Insurance Companies Work?

Insurance is: 1. an arrangement by which a company or the state guarantees to provide compensation for loss, damage, illness or death in return for payment of a specified premium. 2. money paid as compensation under an insurance policy. 3. a thing providing protection against a possible event.

Insurance was originally a game of chance for people willing to gamble on whether ships would survive their voyages.

In this country, three basic types of insurance developed — property, life and health. Today, property insurance (homeowners, auto, liability, fire, etc., and any other insurance that is related to property), while life and health insurance covers the individual's health and death.

In 1688, the first modern form of property insurance (primitive forms date back to Babylonians)was established in Lloyd's coffee shop in London, when a group of risk takers began insuring ships and their cargoes.

In 1759, the Presbyterian Church established the Presbyterian Ministers Fund that charged a penny a month to insure that any congregant's burial expense would be covered. Penny burial insurance evolved into today's life and health insurances.

Of the 25 wealthiest insurance companies in the world, six are based in the United States, with total assets of $4.0681 trillion. The net premiums of the top 25 insurance companies in the world — 12 of them based in America— produced a total income of $1.0376 trillion in 2023.

The 12 companies are the United Health Group, $226.2 billion; Centene Corp. (Well Care Health Plans, Magellan Health and Acariahealth Inc.), $120.3 billion; Elevance Health, $117.4 billion; Kasier Permanente (health providers), almost $100 billion; Humana, $79.8 billion;

Berkshire Hathaway (Berkshire Hathaway Guard Insurance Companies, property and liability), $71.6 billion; State Farm (auto, home and life), $71.1 billion; CVS Health, $62.2 billion; Health Care Service Corp., $46.7billion; Progressive Corp. (auto insurance), $46.4 billion; Allstate Corp. (auto, home), $45.8 billion; and Liberty Mutual (auto), $43.7 billion.

Of the 12 companies based in the United States, six cover various parts of the healthcare system (individual care) and six are property insurers.

The U.S. insurance companies, taken together, are the largest expenditures after home ownership for the average person. Insurance has become the largest business in the country.

But when people need insurance, such as for wildfire, hurricane and flood (mandated by federal government, managed by private companies) insurance; companies can deny or severely limit coverage to people who they feel risk their profits.

For example, State Farm withdrew from the California homeowners market. State Farm and Allstate have been backing out of homeowner insurance over the past several years in areas where wildfires and natural or weather-related disasters occur.

Recent wildfires in California left thousands with total losses when their homes burned because either insurance premiums were so high that homeowners couldn't afford to pay them or they could not even get homeowners insurance.

The same thing seems to happen whenever any natural disaster occurs. Once again, companies that supposedly provide peace of mind and safety to their customers are making every effort to deny policy holders that for which they paid.

TO BE continued.

BERNARD LESLIE is a beekeeping expert who lives beside Kentucky Lake in the northeast corner of Henry County. His email address is bleslie0515@gmail.com.

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