Insurance companies in business of risks

So, the state of Georgia will raise its insurance rates of its employees. They will raise the minimum fee on people who jump using bungee cords and motorcycle riding.

I worked for the state and they raised their fees on smokers by $400 dollars annually and penalized people who lied about their smoking. That was to reduce health costs to the insurer and the state.

What are do they plan to do next? Ban driving cars and trucks to work? I know a state employee who drove to work, but was involved in an accident before they arrived. That person spent several days recuperating.

How will the state and insurer plan to counter that? Have bus service pick up employees and drive them to work? Or, the state and insurer plan to place state employees in a medical inducted coma and place the employee on the shelf for 30 or more years until they retire? Then the state will release them from the coma.

The state and insurer must remember the insurance is based risk-on-risk. That’s the primary reason for their existence. They face risk not only in the insurance business, but in business itself. That is what instructors taught me for two years in business school. Insurance companies must realize that their business centers on risk.

The state and insurer cannot avoid risk at all costs. We risk waking up. Will you fall out of bed, land on the floor and injure yourself? The house’s roof may fall on you. Life is a risk.

The state should watch itself. If Obama’s health care is unconstitutional, then is not the state demand for vehicular insurance illegal?




gotanyfacts 3 years, 11 months ago

You are right. Insurance companies assume a risk when they sell a policy. Depending on the type of policy, they become responsible for paying for medical bills, car repairs, and cash to survivors etc. Why would they assume such a risk? If premiums and return on investments are greater than payoffs and administrative costs, profits accrue and the company stays in business. Risky behavior increases the chance of payouts. While some politically correct behaviors can not be factored in to determine the premium for health insurance, smoking is not one of them.

Driving cars is such a universal activity that costs due to auto accidents are already factored in and applied to everyone. Fret not. It will not be the insurance companies that dictate how you get to work. Government? Hmm!

Much of the increase in health care premiums is due to government mandates which raise costs. Your premium goes up and the government blames the companies for trying to stay profitable enough for investors to stay invested.

As for auto insurance, the state does not require you to insure your car for damages. You are required to take out liability coverage so that someone else does not have to pay for your mistake. Even then, you do not have to have that coverage just because you exist.


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