Insurance - Free Market - Conglomerates

Often while I'm around and about in the Bay, people mention in conversation how much their insurance has gone up. The general consensus is that we need to do something. I don't think the solution is to move somewhere else, because I'm not so sure that it's not just a coastal problem but a problem across the country. Even when we were in Louisville, I was hearing things like "if you call your homeowners insurance carrier too much to ask about claims or file a claim, your insurance will go up..." Insurance is now tied to credit scores, assuming (perhaps rightly so) that if you have credit problems, you are more likely to file a claim. So I started thinking about that. In a sense my company is like an insurance company. People pay us to take care of their web servers, email and web programs. They pay us monthly, and they are paying so that when they have a problem (ie. claim) they can have it handled. Even this morning at 9 AM on a Saturday, I helped a client with his email, by changing a password for him. But the point is, you pay a monthly fee (or yearly fee) and we handle it. Some clients don't ever have problems, some do have more problems, and thats usually the ones with more users to handle. But what if, someone called twice, and I said, "ok your bill is going to double!!! You are paying for my service, but if you actually use it -- I'm going to charge you more! " I'd be in business about 2 weeks before I'd have run off good customers and hurt my bottom line, and people would take their business somewhere else. There are literally probably hundreds of thousands of companies that do what I do across the world. So what if I wanted to leave my insurance company here, and go some where else, I've only got a couple of choices, and even fewer that actually do homeowners insurance. Lack of competition is a problem from the consumer (look at gas prices for instance). Fewer players, means higher prices. Markets where there are many people providing that same service, seems to drive prices down. They call that a free market.

So does it bother me that a huge percentage of "search" goes through one company? Sure it does. What about Cingular, and BellSouth, which is becoming the new AT&T? Does anyone think they'll get better service now? Better prices? I doubt it, I know the service side of it was horrible every time I've ever had to deal with Cingular and BellSouth. It just means we have fewer choices in yet another market. Which means, we have less cheap supply, and demand that is constant which will drive up prices. It's time to do something, and give people a chance to get in to some of these markets and compete -- for instance that Oil & Gas market, with record profits last year of BILLIONS, don't you think that some folks would be getting in to that market. If people are doing great at real estate, you might see that opportunity, and get in on it, and start brokering some deals, or buying land and you can be a player in that market. But oil, thats a different story. I'm not pretending to know all about the oil markets, but I know you don't hear about new people getting in to those markets, and new oil companies. You simply hear about them buying each other, and getting bigger, and prices getting higher, and profits being record breaking.


I'm a firm believer in de-regulating as many things as possible, and keeping the Feds out of as much of our business as we can. It seems like the FEDS can only screw up things when they get involved. Look at immigration and other things that good ol' uncle Sam is supposed to be watching. Our insurance companies need to have an opportunity for more competition, so that prices can come down. Otherwise, only the people who can self insure will build back this region, and prices will fall on everything... I'm sure the market will correct and compensate soon, home prices will surely come down as the supply of them goes up, and they won't have to be insured for as much if the price per sq foot goes down, which will help part of the problem.

I was going to rant about my health insurance going up by a third too, or I can keep my premium the same, but raise my deductible another 1200. I think I'm paying around $1200 a month in insurance right now. Maybe more than that counting my insurance for my company.
If I could simply self insure, and have no major problems, in 4 or 5 years, I could really be doing pretty well on my self-insurance account.
Oh well, not trying to be glum about the subject, but with everything going up higher and higher, it seems like there has to be a better way to offset this inflation.