Saying that he'll get cancelled or his rates jacked up just because he files a claim simply shows a misunderstanding on how insurance works.
In your post, you mention three different types of insurance in two sentances...Property, Casualty, and Health. All three have different rules, laws, and regulations that are laid down by each state's Department of Insurance. That department is a state bureau in charge of making sure that each company that is granted a certificate of authority to do licenced business in that state serves it's clients in the people's best interest. If not, they lose their certificate of authority and are banned from operating there. Companies cannot jack up rates or cancel people willy-nilly or in a discriminitory way. It all has to be approved by the state.
And then it's easy for you to say "well I did and they hiked my rates"...well...look at your past stubs and how much you paid to begin with when you signed up and what your paying now and note that your major medical more than likely has gone up every year whether you filed a claim or not. I havn't filed a claim in 3 years but my major medical goes up every year. Until someone somewhere can convince people who seek health care and then don't pay their bills (not to mention frivilous malpractice claims) who cheat the system--we all will all keep paying higher premiums.
To answer Von's question:
Money to pay claims is in each companies financial reserves, and is required by each different state's laws to have $X Millions in reserve to pay claims. It has nothing to do with their profit margin unless they are a stock insurer (where the company's partial value is dependant on it's value in the stock market at the time, and pays back money to it's insureds when the stock pays a dividend) or a fraternal insurer (where you have to pay a yearly "club" fee to be insured, but the company is non-profit and able to offer cheaper "member only" premiums) or a mutual company. Just as an example AFLAC has $10 Billion in reserves to pay premiums on their supplimental policies. That's simply money set aside earning interest in the event that it's all needed to pay claims. Same for Blue Cross, although as a major medical, their cash reserves for claims is far larger.
"If someone in my family becomes chronically ill, and it cuts into the profit/loss ratio of my insurance provider, it is perfectly fine for them to cancel my contract at will, as it suits them? I fail to see the quality in that. In fact, I would wager on the actual legality of such practice."
No, they can't. And it won't cut into their profit /loss margin because he're how insurance works...
You pay your premiums to cover you in case you or a family member is sick or injured---you ALSO pay your premiums in case some one else or their family member gets sick or injured that is covered by the same company. And others with the same company are paying their premiums in case they or their family gets sick or injured or you or your family gets sick or injured. All the people with that same company are paying into the same cash reserve pool to spread out the risk over a group of people with that same company.
Most major medical companies DO raise their rates each year for the reasons I stated in my first post...when deadbeats abuse the system to get "free" health care--we all end up paying for it. Most supplimental health companies do not increase their rates and people are locked in to that low rate (even lower if you get it as a group through your place of work) for as long as they pay their premiums and do not break their insuring agreement they signed when they got it. There are some supplimental insurance companies that have not raised rates on their in-force policies for over 50 years.
Unless you fail to pay your premiums or you do something to break the insuring agreement you signed--they can't cancel you. If you have excessive instances of at-fault accidents, injure yourself on purpose, or your entire family comes down with some long term highly expensive to treat disease that starts to gobble up the majority of the cash reserves in your "group" companies have been known to rase rates on people in that "group" to make up for it. The odds of that however, are very small.
While most major medicals won't cover wellness and non-emergency visits, many supplimentals will. Many will even cover chiropractor visits associated with an accident.
What WILL cause your rates to go up (except for the health care deadbeats mentioned before)? Anything that makes him or anyone covered in his policy a greater risk. If Von decides tomorrow to change jobs to skydiving instructor, crop duster, professional bugee jumper, or skyscraper window cleaner, his company will either jack up his rates commensurate with that risk, or give him a 30 day cancellation notice and ask him to go elsewhere.
If this thread serves anything?---hopefully it will serve to prod anyone who reads it to go to the file cabinet and break out all the policies and READ them. Find out what coverages you have, how much they pay per occurance, how much liability coverage you have, how much property coverage you have, and what are the stated terms in it for cancellation. If you don't think you have a contract--you do. An insurance policy is a legally binding contract. It has declarations, an insuring agreement, conditions, and exclusions. Everything in your policy will tell you whay the company is responsible for and what you are responsible for.
If you don't understand the wording, terms, or the what's and wherefores--call up the agency you got it from and schedule an appointment. If they won't take the time--then it's time to go shopping somewhere else that will take care of you personally.
ROX
