Insurance, a rant

One of my buddies was lamenting the cost of pet health care insurance. The amounts are outrageous, and after mentally writing a longish response, I did a short one and promised a blog.

The short response is that insurance is a scam. The companies selling it are blood sucking leeches, and the people selling it are either vampires themselves, or are so desperate for personal income that they'll debase themselves by frightening people into buying their products.

Let's begin at the beginning. What is insurance for? It is a bet, hedging against the loss of something. Normally, if you lose something and want to replace it, you buy another one. However, some things you can't buy another one easily. Houses fit into that category for most people. The odds of your house burning down might be small, but the consequence is catastrophic. Insurance shares the risk for when a loss is catastrophic.

Life insurance is another one, along with parts of life. Or your body, whichever comes first. I don't know how they decided how much an arm is worth and how to sell a premium for it, but I did say everyone involved with the industry is a moral vulture.

In some cases you have no choice. If you want to mortgage your house, the bank makes you buy the insurance that protects them. (Note the pronouns there.) Much the same with leased cars (and don't get me started there). The government makes you provide proof of insurance before you can register a vehicle because of the damage you can cause.

But when did they start flogging insurance for cheap consumer goods? That's what extended warranties are, in case you missed it. I remember buying a CD player once, and the sales person put more effort into trying to sell me the extended warranty than in selling the product itself. In almost every case, the extended warranty is a bad deal.

And life insurance. Unless you have children, or a disabled spouse who cannot support themselves, you shouldn't have life insurance. Once your kids are out of the nest, drop the insurance. It is to replace your income if something happens to you. Once the kids can work, they're on their own. Same with spouse.

And pet insurance! Which is what got me started. Say it with me, pets are not children. We love them, we care for them, but they have short lives. They will die. The insurance vampires prey on your feelings for them, and scare up the costs of vet bills. Dental work starts at $1000 and goes up!!! They premium up for the worst, and put you through the wringer on denying your claim, so you have to pay anyways. If you can't afford to pay the vet bills as they come up, then you can't afford pets, or you need to have the emotional balls to say goodbye to your furry friend.

One vet, who we liked a lot, tried to sell us accupuncture for our cat with kidney disease. Ummm, no. Kidney disease was not treatable then, and I don't think it is now. The best you can do is keep them comfortable, and when the time comes, you do that last favour for a loved friend.

Think about the nature of a bet, and the flow of information. Who is accepting the bet, and how much do they know compared to you? Think about life insurance. They don't know how long any individual will live, or what will kill them, but in aggregate, they know that information exactly. They probably even know more about your lab tests than you do. After all, you listen to your doctor saying everything is fine. The insurance industry employ people to pore over those lab results, looking for that preexisting condition, or markers that affect life. They can price the premium and the payouts so they make money, because that's what the industry does. They don't care about you or your children or pets, except as levers to sell you insurance.

It's a profit driven venture, and they have to make money. They know if they sell the premiums, and pay out the expected amounts, and deny your claims, they make money. It's only when there is a huge outlier event, like the Calgary floods in 2013 that they have a bad year. Even then there is a sweet little deal for them called re-insurance.

Same with pet insurance. They have far more information than you about the costs of pet healthcare. Of course they structure the premium so they make money. Figure out your yearly pet premium, over the life of the pet. You will almost certainly spend less than that if you take care of your pet, and restrain the spendthrift impulses of your vet.

Think about what is so valuable in your life that you couldn't go get another one. Insure that. Otherwise, accept the risks of living. Things can be replaced or do without. Even photos can be duplicated for storage off-site. Insurance helps you replace a house, a car. The rest you suck up.

Priceless heirlooms are another thing. That's a tough one. Consider your beloved grandmother's wedding dress that you and your mom wore, and you hope to have your daughter wear. In one sense it's priceless, and no amount of insurance coverage lets you replace that loss. So do you insure it? I wouldn't. I'd spend that insurance premium to take care of it.

And pets again. This is going to sound cruel. Some people put that sign on the front door, listing the people that live there, and their pets, so the firefighters know who to rescue. Sorry, I disagree. I would never ask a firefighter to risk their life for a pet. I love my cats dearly, but that is nothing compared to the love of the other people in that fire fighter's life. If you can't afford the potential vet bill, don't get a pet.

Life is a risk. We live in the safest human society ever, and shit happens. Take care of yourself, take care of your loved ones, take care of your stuff. Here's a test about your stuff. Can you sit down and make a list of all the stuff in your house? I certainly can't, and I've put some effort into listing books and discs. We've lived here 30+ years, and there's a lot of stuff.

There are no guarantees. Life is a risk. Who do you want to trust, you to make the risk decisions that are right for you and your family? Or a vulture insurance company that only sees you as a source of premiums.

Your reward for wading through the rant. Some dahlias in happier times.