The logic behind the insurance industry’s payout systems

October 14, 2017

The insurance industry spends BILLIONS of dollars advertising for new customers every year. Statistics tell us that every third commercial seen on TV is an insurance company telling us how well they are going to take care of us.

However, when the rubber meets the road, and policy holders execute a home insurance claim, more often than not, there is some back peddling going on. This when the insurance companies take out the magnifying glass and the fine print is scrutinized.

How the money is divided

There is a major conflict of interest in the insurance industry. Because insurance companies are publicly traded in the stock exchange, and they take on stock holders, the insurance companies have a fiduciary responsibility to do everything they can to show a profit for their investors.

In addition, insurance companies also have agents (independent franchise owners) that they have to help gain profits in order for them to continue selling more policies. All this is done while the company analyses statistics concerning risk, so that statistically they have the upper hand.

Finally, the policy is underwritten, taking under consideration all the risk involved. A premium is settled upon. That again, statistically MUST favor the company. Make no mistake about it, insurance companies are well positioned to make a profit.



How the policyholder is handled

When a home insurance claim is placed, insurance companies are contractually obligated to help policyholders bring the property back to pre-damaged conditions. However, when the policy is written, they specify certain conditions that favor the insurance company, and not necessarily the policyholder.

These conditions are built-in profit centers. When these conditions are not met, more profits are gained by the insurance companies. Because most policies are written in a very technical language, most policyholders do not clearly understand what is required of them. This is the legal loop-hole that allows insurance companies to profit obscene amounts of money every year. Great from an investors standpoint. Not so good from a policyholders standpoint.

How Public Adjusters help

As with any legal debate, if you don’t understand the policy or contract, you will be in an unfavorable position. That is why we hire lawyers. Insurance policies, whether auto, life, health or home insurance, are written is such a fashion that they are not easily understood by the average person.

Not having a clear understanding minimizes your ability to gain. In this situation, as in many others, clarity is power. Fully understanding what you are covered for, and what is required for you to recover the appropriate amount is paramount for your success.

Public adjusters are experts in interpreting the policy so you can settle your claim properly. There are many nuances that, if missed, can mean several thousands of dollars that will remain as profits for the insurance company, as opposed to going back to you for repairs.

Public adjusters are important advocates for home and business owners when an insurance claim is being placed. If you experience damage to your property, pick up the phone and call me for a free claims evaluation. There is no out-of-pocket cost to you.

Mike Martinez 856-430-2640 or contact me with the contact form on the home page of

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