Farmers insurance going out of business.

[SmokinLoon]

well, our old agent, i knew and liked. he even came to both my grand mothers and grand fathers viewings and funerals. he retired, and his son took over. i cannot say in this forum what my opinion of his son is.

 

He did as a good agent should do.  It is unfortunate that companies have taken the position of insurance agent and made it a commodity.  Today, it is all about mass marketing and "growing".  The management aspect of it has gone by the wayside, hence why I got out of being an agent.  I has grown my book and had ideal accounts: losses were low, retention was high, etc, etc, but I had a regional manage threaten me with my contract if I didnt keep growing.  I sold out within a year and banked my $$$.  The worst thing is that the insurance companies are not having anyone in management who was an agent.  You can not lead nor can you teach something you have not done.

[CAP1]

He did as a good agent should do.  It is unfortunate that companies have taken the position of insurance agent and made it a commodity.  Today, it is all about mass marketing and "growing".  The management aspect of it has gone by the wayside, hence why I got out of being an agent.  I has grown my book and had ideal accounts: losses were low, retention was high, etc, etc, but I had a regional manage threaten me with my contract if I didnt keep growing.  I sold out within a year and banked my $$$.  The worst thing is that the insurance companies are not having anyone in management who was an agent.  You can not lead nor can you teach something you have not done.

 yep.

 our homeowners is with allstate. overall, although allstate treated me like crap with auto insurance, they've treated our homeowners well, so even though i can't stand our agent, i deal with them. also partly because he never makes the personal visits his father used to make.

 now with my garage keepers insurance...my agent through them is a VERY cool guy. in fact, he is the sole reason i insured with these people. he stopped in out of the blue, wasn't pushy, and was very interesting to chat with. he stops in when my paynments are due. we bs for a bit, i write him a check, and he goes on his way.

[guncrasher]

Wrong.  Insurance companies pay out about $1.02 in claims for every $1 they bring in.  How do they make money???  By getting a %3-6 return on their investments in the stock market and bonds.  They rates are HIGHLY regulated by the States.  If anyone thinks for one minute that the insurance companies are rolling in the dough think again, their profit margins are very minimal.  When the companies as we know started over 100 years ago (that includes THEE big boy Loyds of London), they made their profits and put them away.  That old money is what the companies are standing on today.  Times have changed in a major way, think of it this way: 50 years ago when the wind came up and ripped off teh screen door the home owner fixed it on their own.  Today, the "I pay my premium so someone else will fix it" mentality rules the day.  The rate you pay is DIRECTLY related to the premium brought in vs claims paid out ratio in your rating area.  I can go on and on regarding insurance companies, the money, claims, etc.  But I will wait for the ensuing questions.       Take my word for it: Take the time to get to know your agent, ask for options not prices, and do not skimp on insurance because for a few $ more you could have double or triple the coverage.

How do I know all of this?  I was an insurance agent for 8 years, most of it with Allstate.  Currently I am a claims adjuster and work with property claims such as houses, farms, machinery, etc.

I worked at a life insurance company home office for years.  we didnt make most of our money from investments, we got a good chunk of money from them but most of our profits came from polices.

and just for your info, in the early days, insurance company made money the old fashion way.  they took your premiums then would refuse to pay any claims as they would always look for a way out.

as an example, our company Transamerica Life refused to pay a death claim on a guy when they find out he wrote in his application that his father had died at age 47 when in fact it was age 49.  the reason for the denial?  he lied on his application.  this was used as an example of why insurance policies should be regulated.

Insurance companies only started paying out claims regularly after the federal and state intervened.  they wrote some pretty good laws that basically guarantee that if you have a valid policy and a valid claim then you will get your benefit.

Most insurance policies are regularly reinsured.  what that means is that they will sell a portion of your police to other companies so basically the insurance company is buying insurance in case they have to pay a claim.

the claim that insurance pay out more money in claims than they receive would be impossible for a company to sustain, even if all their investments made money.  because on top of the money paid in claims they also have expenses such as employees, etc.

so if you assume that in the latest hurricane x company paid a billion dollars in claims, be aware that they actually only paid a portion of it since they got money back from those policies that were reinsured.  that's why the call it "spreading the risk", when there's a big catastrophe, basically all the insurance companies in the us, canada and europe pay a portion of all the claims.


semp

[SmokinLoon]

I worked at a life insurance company home office for years.  we didnt make most of our money from investments, we got a good chunk of money from them but most of our profits came from polices.

and just for your info, in the early days, insurance company made money the old fashion way.  they took your premiums then would refuse to pay any claims as they would always look for a way out.

as an example, our company Transamerica Life refused to pay a death claim on a guy when they find out he wrote in his application that his father had died at age 47 when in fact it was age 49.  the reason for the denial?  he lied on his application.  this was used as an example of why insurance policies should be regulated.

Insurance companies only started paying out claims regularly after the federal and state intervened.  they wrote some pretty good laws that basically guarantee that if you have a valid policy and a valid claim then you will get your benefit.

Most insurance policies are regularly reinsured.  what that means is that they will sell a portion of your police to other companies so basically the insurance company is buying insurance in case they have to pay a claim.

the claim that insurance pay out more money in claims than they receive would be impossible for a company to sustain, even if all their investments made money.  because on top of the money paid in claims they also have expenses such as employees, etc.

so if you assume that in the latest hurricane x company paid a billion dollars in claims, be aware that they actually only paid a portion of it since they got money back from those policies that were reinsured.  that's why the call it "spreading the risk", when there's a big catastrophe, basically all the insurance companies in the us, canada and europe pay a portion of all the claims.


semp

Not sure where you got your info, but much of it is questionable and quite over-reaching. 

When a contract is breached, it is what it is.  If the insured lied about his family history then it adversely affected rates, I bet his family received all of their premium and any cash back instead of a death benefit. 

In the "old days", most insurance companies were a true mutual company.  They paid their claims, but the ratios of paid out to paid in were much smaller.  Unlike today where someone can have a $500k home insured for $1500 a year.  stop and think how many $1500 premiums need to be paid for a $750,000 loss per year.  The profit margins are a whole lot smaller today than they were 80 years ago.

Reinsurance is quite common.  I work for one (Grinnell Mutual Reinsurance Co.), we re-insure smaller mutual companies.  In turn, Grinnell is re-insured through Loyd's of London.  It is the BIG money behind small money, metaphorically speaking.  When it comes down to it, it is the underwriting company that is on the hook for the up front claim.

As for profit margins and $1 in vs $1.02 out, when the return on the investments are in billions of dollars it is more than enough for expenses.     Check out the earning of Allstate, they are a public company.  The info is available to anyone.  It will show just how much they bring in and just how much the pay out in "liabilities".  Billions.       

[eddiek]

I am very good friends with and temporarily worked for my insurance agent.  Am still a licensed independent insurance adjuster, also.
My opinion is that insurance is only as good as your AGENT.  An agent that is interested in getting you the best deal on your insurance, and settling claims fairly and in a timely manner...........that type agent is who you should stick with.  No matter the insurance company, the agent is who will be dealing with first........how willing and dedicated and sincere they prove to be is the determining factor in how good your policy is.
My agent is not just my agent.......she is my friend and has watched my kids grow up, has shown a genuine interest in not just my property, but my overall life and those of my kids. 
When she changed companies, I went with her.  Knew the guy who took over the agency she left (Germania), heard how drastically he had changed the way things were being run out of that office, called her, and moved everything over to Farm Bureau.  Had an adjuster try to undercut me on a claim, a simple call to her, and things were made right.

[eagl]

now with my garage keepers insurance...my agent through them is a VERY cool guy. in fact, he is the sole reason i insured with these people. he stopped in out of the blue, wasn't pushy, and was very interesting to chat with. he stops in when my paynments are due. we bs for a bit, i write him a check, and he goes on his way.

I know some churches that do fundraising that way...  Are you sure that's not "promise keepers", not "garage keepers"?  Read the fine print, you might need to be dead to collect on a claim   

[CAP1]

I know some churches that do fundraising that way...  Are you sure that's not "promise keepers", not "garage keepers"?  Read the fine print, you might need to be dead to collect on a claim   

 nope. it's called garage keepers in nj. it's through a proper insurance company. i'll be insureing my rollback with them, as soon as i finish rebuilding the tilt and slide rams.

[SmokinLoon]

LOL!!!  "Garage keepers" insurance is for business owners who are in custody of someone else's property for business purposes.  The best example would be that of a mechanic having a customer's car over night for repairs, etc.  If the car goes up in smoke in a building fire, get damaged, etc, then the "garage keeper" policy would cover the damages.  It is usually pretty cost effective to have it.   

[Fud]

Crap...Now I can't get that Farmer's jingle outta my head 

[guncrasher]

Not sure where you got your info, but much of it is questionable and quite over-reaching.  

When a contract is breached, it is what it is.  If the insured lied about his family history then it adversely affected rates, I bet his family received all of their premium and any cash back instead of a death benefit.  no this cases that I posted was the reason the goverment took action, it was in LOMA 1 study case and it was back in the 30's I dont remember exactly.

In the "old days", most insurance companies were a true mutual company.  They paid their claims, but the ratios of paid out to paid in were much smaller.  Unlike today where someone can have a $500k home insured for $1500 a year.  stop and think how many $1500 premiums need to be paid for a $750,000 loss per year.  The profit margins are a whole lot smaller today than they were 80 years ago.  that is why they have actuaries.  they estimate the mortality rate which is used to create the premiums.

Reinsurance is quite common.  I work for one (Grinnell Mutual Reinsurance Co.), we re-insure smaller mutual companies.  In turn, Grinnell is re-insured through Loyd's of London.  It is the BIG money behind small money, metaphorically speaking.  When it comes down to it, it is the underwriting company that is on the hook for the up front claim.

As for profit margins and $1 in vs $1.02 out, when the return on the investments are in billions of dollars it is more than enough for expenses.    Check out the earning of Allstate, they are a public company.  The info is available to anyone.  It will show just how much they bring in and just how much the pay out in "liabilities".  Billions.      

where i got my info?  taking the mandatory LOMA courses that were required.  and I worked in the insurance business for 15 years.  we never came close to spending 1.02 in claims for every dollar collected.

 if insurance companies would actually pay 1.02 for every dollar they wouldnt be in business for long.  remember they also have to have the reserve account (which is used to pay future claims, not current) as mandated by law.  which adds another 10 or 15 cents that on top expenses which in the first couple of years exceed premiums paid plus the cost of employees.  that would mean that the returns on investment would have to be at least 50% just to break even.  which is not sustainable.

there has been some years when there has been some really big natural disasters like hurricanes or earthquakes in which case the companies actually paid more in claims than what they got in premiums.  but that is not the norm.

edit:

remember also that if they pay out 1.02 for every dollars then one of the following is right:

-the claims paid is actually higher since they got money back from their reinsurers so the 1.02 per dollar is inaccurate.
-they claims paid doesnt include the money they got back from their reinsurers so the 1.02 per dollar is inaccurate.

semp

[Nathan60]

ahh loma that reminds me I gotta wrap up 281 before the end of the month lol

[Shuffler]

UPDATE..... farmers still sucks... lol


My broker has me setup with the same coverage for $200 less per year than I was originally paying with farmers.

I now have placed farmers in the same toilet with allstate. lol

[AAJagerX]

State Farm has always done good by me.

QFT 

State Farm has been great for me as well.

[SmokinLoon]

where i got my info?  taking the mandatory LOMA courses that were required.  and I worked in the insurance business for 15 years.  we never came close to spending 1.02 in claims for every dollar collected.

 if insurance companies would actually pay 1.02 for every dollar they wouldnt be in business for long.  remember they also have to have the reserve account (which is used to pay future claims, not current) as mandated by law.  which adds another 10 or 15 cents that on top expenses which in the first couple of years exceed premiums paid plus the cost of employees.  that would mean that the returns on investment would have to be at least 50% just to break even.  which is not sustainable.

there has been some years when there has been some really big natural disasters like hurricanes or earthquakes in which case the companies actually paid more in claims than what they got in premiums.  but that is not the norm.

edit:

remember also that if they pay out 1.02 for every dollars then one of the following is right:

-the claims paid is actually higher since they got money back from their reinsurers so the 1.02 per dollar is inaccurate.
-they claims paid doesnt include the money they got back from their reinsurers so the 1.02 per dollar is inaccurate.

semp

As I suggested, look up the information in Allstate.  Grab a prospectus and read all about it, there are sources listed in there show specifically that for every premium dollar bought in the past 8 years they paid out an average of $1.02 in claims.  This has nothing to do with its addition to reserves and expenses, the premium paid is directly related to loss experience.  The actual ratio of all things combines fall between %45 and %65 once returns on investments, co-insurance, and expenses are calculated in.  States mandate that a certain amount of all income be set in to reserves.  I understand the reinsurance "co-insurance" (you say "pay back") fully and how it works, remember that I am referring to the PnC side of things, not the life insurance side of things.  They are 2 very different monsters.