It’s election season again, and politicians are out shaking hands, kissing babies, and making promises they can’t possibly keep. Even in Death Valley on Saturday (a victory we can all savor regardless of politics), you saw a “Vote for So-and-so” sticker everywhere you turned. Each of these candidates says something worth hearing, even if it’s a reason not to vote for them. One of the most common promises this election cycle is that they will find a way to protect our state and help voters find a way to protect the things that matter most, like their homes, lives, and property. Here a few apolitical (except where insurance is concerned) things to keep in mind before you vote:
-
Lowering insurance costs alone is not going to repair our insurance market. Cost is only the greatest differentiator in the absence of tangible value. Good should not have to suffer for the bad, but what is good? Higher prices and profits are not a bad thing in the long run. They are what allow carriers to operate efficiently in all market conditions. Stronger reserves allow carriers to weather the storm (literally), and profitable years give carriers a reason to stick around even after the bad ones.
-
Businesses do not exist to lose money. Free market principles show us that overly-regulating carriers leads to fewer choices and higher prices. The companies in the market can raise rates and/or be more selective in what they write.
-
Adverse selection makes prices go up even more. Many times, the people who can least afford it end up with higher premiums (landlords, those who own outright, etc…may choose to take on more risk themselves, banks don’t let borrowers have that option).
-
Beware of promises to make carriers pay their “fair share”. Bad actors should be punished, whether they are carriers, adjusters, agents, or attorneys. “Discourage litigation. Persuade your neighbors to compromise whenever you can. Point out to them how the nominal winner is often a real loser - in fees, expenses, and waste of time.” Abe Lincoln
-
Beware of promises that do not offer tangible solutions to fix the problems we are currently facing. Insurance should not be a political football, used to score easy points with voters. Aware consumers prevent this from happening.
We, and our elected officials, face hard choices, and there are no easy answers to how to escape this insurance quagmire. While we should agree with the candidates we vote for on most things, we must elect people who have plans but are flexible enough to do what is necessary to adjust as things change. General Douglass McArthur: A good plan today is better than the perfect plan next week. Have a good plan when you turn out to the polls tomorrow, and feel free to reach out to me personally if you have specific questions about legislation. If you don’t have good insurance game plan yet, we can help at coastallains.com