Insurance...for who?

Why do we purchase insurance?

I always thought that insurance for things like homes, cars, and our lives was purchased so that if anything was to happen to our things, there would be money set aside to help recover some of the costs incurred.

Well is my face ever red! Ontario drivers could be facing double digit insurance premium hikes in the next 12 months because, as the Insurance Bureau of Canada says, insurers are facing a rising demand for treatment and compensation.

I must have been naïve all these years because I thought that’s why we paid for insurance in the first place.

Apparently, insurance company’s bottom lines are beginning to sag, so drivers will have to pick up the slack.

Take for instance a driver who has never filed a claim in 10 years. They have paid about $100 a month for insurance for a grand total of $120,000 into the insurance company’s pot.

Now, I realize that money goes to other drivers who have needed compensation but what happens when our hypothetical driver crashes their car beyond repair and requires $10,000 as compensation for their vehicle which is beyond repair? Well, that’s an $110,000 positive for the insurance company and our driver will be paying much more in the future.

The insurance company hikes our diver’s rates because he was in an accident and he is now a more risky driver, but really they just him to repay the money he used from the pot; the money he put there in the first place.

Now driver’s across the province could be paying up to 30 percent more on their insurance premiums because as Leonard Sharman of Co-operators General Insurance Co. explains ``Things like assessments, medical rehabilitation, physiotherapy costs, etc., have been increasing pretty dramatically.''

Well if those things are increasing, the insurance company’s profits must be shrinking, so how do they recoup that loss? By charging their customers more!!