It’s easy to criticize Wall Street, especially our financial sector, and I’ve spoken out against their corruption for years. However, a recent personal experience I’m currently dealing with has prompted me to write something on a corrupt industry I don’t think gets nearly enough attention: The insurance industry.
Sure, we focus a decent amount of attention on health insurance companies, but the whole insurance industry is just as crooked and corrupt.
Here’s what I’m currently dealing with.
On December 2, 2016 I was involved in an “accident” – though I use the word “accident” very loosely. What happened was as I was taking a left turn, a car in the inside turning lane (my lane could either go left or straight) veered into my lane, forcing me to make the decision to either be hit by this other vehicle or swerve to avoid a collision. Being that I thought I was making the smart choice, I swerved. Unfortunately, doing so caused me to “curb-check” my two right tires. This led to one rim being completely ruined, my other rim needing a complete reconditioning. both tires gashed beyond repair, my alignment being messed up and the need for some very minor suspension adjustments. Overall, the total cost of the repairs came to around $2,000 (minus my $500 deductible).
Now I have no idea if this other driver even knew my lane could turn left or that they had caused me to hit the curb to avoid colliding with them. Nevertheless, they drove off as I immediately pulled into a parking lot with two completely flat tires.
Well, after everything was settled and an insurance adjuster came out to assess the damages so I could begin repairs on my vehicle, I was then told by GEICO that the accident was considered my fault because I didn’t get the other person’s insurance information.
I was furious.
After talking to several people at GEICO, they basically told me that it wasn’t considered a “hit and run” because, obviously, the other vehicle didn’t make contact with mine. But since I didn’t get the insurance information from the other driver, the accident was considered “at-fault” because I was in control of the vehicle when I decided to drive it into the curb. Mind you, I did this to avoid having another car hit me.
That’s when I explained to all of these people that I had exactly two choices:
- Either allow the other care to hit me, causing a much worse accident. — or —
- Swerve to avoid contact with the other vehicle, which caused me to hit the curb.
At that point, and I kid you not, I had at least two of the representatives from GEICO essentially call me a liar, saying that they couldn’t say for certain if those were my only two options because they weren’t in the vehicle with me.
Without directly saying so, what GEICO was telling me was that, had I let the car hit me and they still drove away, it would have been better for me. Then it would have been considered a “hit and run,” therefore wouldn’t be filed as an “at-fault” accident on my driving record. That or I should have somehow chased down this individual with two flat tires to get their insurance information.
Either way, GEICO’s stance was that, since I was in control of my vehicle when I made the responsible decision to swerve to avoid having this other vehicle hit me, the accident was “my fault.”
Astonished, I repeatedly accused them of essentially telling me that it would have been better to have had this car hit me, because swerving to avoid the accident seems to have been the big “mistake” I made according to their “logic.” Of course they denied this, though none of the reps I spoke with could tell me how I could have avoided an accident when my only two options were to either let that car hit me or swerve and hit the curb.
But the bottom line was, GEICO (and I’m sure other companies would do this as well) was going to use the circumstances to play dumb, claim that I couldn’t prove this other car pushed me out of my lane (no, there weren’t witnesses or cameras at this intersection, unfortunately), and basically say that this accident was caused by my poor driving.
They assured me that this “at-fault” accident wouldn’t necessarily lead to my rates going up, though I knew that was complete nonsense.
Then yesterday while I was out running an errand I got an email from GEICO letting me know my policy was set to auto-renew in a few weeks and my new billing information was available. Shockingly, my rates went up.
Before this “accident,” I was paying $195 per month for full coverage on two vehicles, and my rate had been fairly consistent throughout the years I’ve had GEICO.
So, what was my new monthly rate going to be? $321 — a $126 monthly increase.
For one “at-fault” accident they paid out around $2,000 for, they nearly doubled my rates. An accident that’s only “my fault” because I didn’t allow another vehicle to hit me — which would have made damages even worse and more costly.
Keep in mind that I’ve had GEICO for around 7 or 8 years. I did switch for one year, but eventually came back. In my 20 years driving I’ve never had an accident, and with GEICO I had a grand total of one glass claim for a rock that chipped my window.
So, let’s just low ball it and say I had GEICO for 7 years where my average monthly payment was around $150 (I didn’t always have two vehicles).
7 x 12 = 84 months x $150 per month = $12,600 (rough estimate).
Again, clean driving record, no tickets or other accidents — yet for one accident they increased my monthly rate by $126 on a claim where they paid out around $2,000. This means if I keep GEICO, in about 16 months (if the current rate holds, which it most certainly will), I will have paid back what they paid out on this claim — plus my rates will almost certainly remain high for the next 5 years because “that’s how this works.”
In other words, I paid GEICO well over $12,000 in premiums over the last several years, and the one time I had a claim where they were forced to do the damn job I’ve been paying them to do, their response is to jack up my rates to basically recoup the money they paid out (and more) via higher premiums.
Now I get what people in the insurance business will say: “Well, since there were no witnesses, all they have is your word and you could very well be lying.”
Yes, I get that. But that’s where common sense should come into play.
If you have someone who’s been insured with you for years, who has a clean driving record with no accidents in nearly 20 years of driving, basic common sense would seem to dictate that this is a responsible driver who’s probably being honest.
But why would a company like GEICO use common sense when they can basically use a quasi-loophole to call the accident my fault, jack up my rates and force me to pay them back the money they paid out — plus more?
Honestly, what was the point of even having insurance? If I’m going to pay thousands to a company, only to finally file a claim that’s going to then lead that company to jack up my rates to take that money they paid out back from me, what “service” are they providing?
If I were a driver with multiple tickets, or a few accidents on my record, then I could understand that. But I’ve been driving for nearly two decades with a clean driving record. To nearly double my monthly payment based on one claim where this multi-million dollar company paid out a whopping $2,000 is ridiculous.
But this is what nearly all insurance companies do: Screw over their customers.
This is a for-profit industry that views human beings as both revenue streams and expenses. It’s their job to find the best way to take as much money from us as they can, while paying out as little as possible.
Why do some companies factor in your credit score when determining your insurance rate? What does a credit report have to do with my driving record? If you’re someone who’s been driving for 20-30 years with a clean driving record, what does your payment history on a Visa credit card have to do with what type of driver you are?
The truth is, it doesn’t have anything to do with it. But this another metric these companies have used so that they can “justify” charging people more for insurance (especially poor people since they’re the ones who tend to have lower credit scores).
Health, home owners, renters — they’re all the same. It’s for-profit companies that are doing everything they can to pay out as little as possible because they’re in it to make a profit, not actually provide a service.
As my situation clearly indicates, when GEICO was forced to provide a service that I’ve paid them more than $12,000 over the last few years to provide, they seized on the first opportunity they could to jack up my rates. Even though what they paid out was a fraction of what I’ve paid to them over the years where they’ve provided me absolutely nothing but a “peace of mind.” And, ultimately, if I stay with them, I’ll end up paying them even more than they paid out on this claim due to the massive increase in my insurance rate.
When you get right down to it, they didn’t ultimately provide me any sort of a benefit because I ended up paying them that money back anyway. And GEICO will get away with this — because they can.
If there were a witness who had stopped, they wouldn’t be able to do this. If I had allowed the other car to hit me (just let that logic sink in for a moment), and that person still drove off, then it would have been considered a hit and run, therefore not “my fault.” But because there were unfortunately no witnesses, I successfully managed to avoid allowing the other car to hit me, and I was unable to chase the other vehicle down because I had two flat tires, GEICO can get away with calling it an “at-fault” accident and jacking up my rates, simply because they can.
Not because it’s right the right thing to do, or because my driving history tells them that I’m a “high-risk driver,” but because the for-profit insurance system, and the law protecting these companies, empowers them to screw over consumers.
What lesson have I learned from all of this (remember, this is my first accident so I’ve never been through any of this) based on what GEICO reps told me?
If a car swerves into my lane, apparently I’m supposed to let them hit me. It’s ridiculous that you can literally be punished by your insurance company for making the responsible decision to avoid a much more severe accident.
So, when we’re talking about how corrupt Wall Street and the financial sector is, we really need to start highlighting how unethical and crooked the insurance industry is as well. These crooks are every bit as shady as anything I’ve seen from Wall Street and the big banks.