Do You Really Need Insurance — Or Is It a Scam?

It turns out that a lot of people think insurance is a scam, and if you’re honest with yourself, you might be one of them. As much as we hate the idea, we understand where you’re coming from — it’s difficult to know who to trust, especially when considering deeply personal and financial decisions.

At Lindow, we’re involved in the insurance industry day in and day out and can assure you that insurance is not a scam. We know that you might need a little more proof to take our claim at face value, though — so we’re here to break down the way insurance works and how likely you are to actually need it.

Let’s get started.

How does insurance really work?

Everyone is subject to risks simply by living their daily life, from car accidents to flooded basements and everything in-between. The basic idea behind insurance is simple: We all contribute to a common pool by paying monthly insurance premiums so that whoever actually experiences the realization of their risk can pull from the pool to cover the cost instead of having to foot the bill by themselves.

This works because most people can afford a predictable premium price (especially when you work with an independent insurance agent who can shop around to find you the best policy rate) but most of us are not prepared for an emergency accident that could cost tens of thousands of dollars.

In this way, contributing a monthly premium protects us from worrying about the future. At the end of the day, we’re paying for the peace of mind that we have protection in case we need it.

Security might not be a tangible good, but it’s worthwhile — remember that our owners, agents, and other staff members aren’t just employees in the insurance industry. We’re all people who have insurance policies of our own, too!

What are the chances I’ll actually need my insurance?

Some people fully understand how insurance works but think their individual risk of needing to file a claim is lower than the average — they’d rather skip the premiums and pay the actual bill if an emergency arises.

We get this train of thought, but it’s problematic for a few reasons. First, it can be difficult (if not impossible) to plan ahead and make sure you have the necessary funds to cover an emergency. For example, the average car accident insurance claim costs nearly $24k — if you don’t have insurance, you’d need to have quite the sum of money sitting around in an easily accessible bank account to cover the cost. That can be difficult to do!

It’s also impossible to know what kind of emergency you might experience. No matter how much your vehicle is worth, you never know how much someone else’s vehicle is worth. Their vehicle could be worth more than your own, and you’ll be on the hook to pay for those more expensive repairs.

Finally, it’s a legal requirement to have some types of coverage, particularly auto liability insurance. You can be fined if you’re caught driving without it, even if it’s just a regular traffic stop. What’s more? Most mortgages require home insurance, even if it’s not federally mandated.

If all that’s not enough to convince you that insurance is worthwhile, let’s look at the chances that you’ll end up using your policies.

Auto Insurance Statistics

• There are more than six million car accidents in the United States every year
• The average driver will crash about every 17 years — young adults and seniors are even more likely to have an accident
• A fatal car crash occurs every sixteen minutes on average
• The annual economic cost of US car accidents is more than $240 billion
• The average car crash insurance claim costs nearly $24k

Home Insurance Statistics

• The average homeowners insurance claim amount is more than $12k
• More than 6 percent of insured homes have at least one claim each year
• Fire, lightning, and liability claims are the most infrequent but most expensive — it’s tempting to not get insurance for these events since they seem “rare,” but damage can easily reach $20k
• The average homeowner files a claim every 10 years

We know insurance isn’t fun — but it’s important

At Lindow Insurance, our helpful hometown agents are committed to making your insurance experience not only tolerable, but enjoyable. We’ll work with your unique circumstances to find the most complete coverage at the best possible price for your family — our network of more than 40 insurance carriers allows us to shop around to find your perfect fit!

If you have any questions about your insurance policies or want to assess your individual risk, don’t hesitate to reach out to us. We’re always here to listen and help you protect your family.