4 common misconceptions about insurance companies

Why do insurance companies get such a bad rap? Perhaps it dates back to the early days of insurance when the industry was young, foolish and a bit scandalous. 
But even today, with strict regulations in place, the negative perception of insurance companies persists. We’re here to address the top four misconceptions about insurance. 

Misconception 1: Every loss is covered by my policy. 

First, let’s be frank. How many of us have actually read our insurance policies — word-for-word? 
Sure, the content isn’t thrilling but it does clearly outline what’s covered and, most important, what’s not. For example, did you know that tree removal is typically only covered if the tree hits a covered structure? This means that if a tree falls and hits the ground, you are responsible for the costs to remove it. Isn’t it better to know about these types of coverage exclusions in advance instead of when you’re stuck with a downed tree on your property and a $5,000 estimate for its removal? We think so. 

RELATED READ: 3 things to know about tree insurance coverage for businesses 

Misconception 2: Having a claim is like winning the lottery. 

It’s important to remember that the purpose of insurance isn’t to make you financially better off than you were before the event occurred. The purpose is to restore you to your pre-loss condition, according to the terms and limits of the policy. When others inflate their claims, stage accidents or misrepresent the facts for a larger settlement, we all pay for their dishonesty. In fact, insurance fraud amounts to approximately $40 billion per year, costing the average U.S. family between $400 and $700 in increased premiums annually. 

Honesty is always the best policy, especially in insurance. 

Misconception 3: Working in insurance is boring. 

Insurance isn’t the stodgy and dull industry it once was. It’s an industry that’s rapidly transforming with new technologies and innovative ideas. Today, the property-and-casualty industry employs more than 665,000 people, leading fulfilling careers in underwriting, claims, information technology, risk control, finance, communications, marketing, human resources, investments, analytics, investor relations and more. We work in insurance — jealous much?  

The insurance industry is a great choice for anyone looking for a stable and rewarding career with opportunities for growth. Plus, some companies like UFG Insurance have even earned recognition as a “Top Workplace” by its employees. That says it all! 

Misconception 4: Insurance companies are greedy. 

In addition to paying out billions in losses to policyholders each year ($74.4 billion in property losses in 2020, to be exact), the insurance industry is committed to giving back. A 2020 report by McKinsey & Company found that charitable giving in the insurance industry was between $560-$600 million annually from 2015-2019, with a focus on education, health and social services and community. 

You’ll also recall that in 2020 the auto insurance industry returned more than $18 billion in auto insurance premiums to customers in response to the decline in miles driven during the COVID-19 pandemic. It was a welcome refund for many. 

Thanks for getting to the bottom of these four common misconceptions with us. If you happen to be in the market for insurance for your business, consider UFG — we view every claim as an opportunity to prove to our customers that they made the right decision when choosing us. Connect with a UFG agent today.