originally posted by: JAGStorm
a reply to: AMPTAH
That is the absolute worst business system i've ever heard of, but doesn't surprise me at all. Insurance is all about the money. They need to raise
the rates for people that are using the system the most and lower it for the ones that don't "cost" them more.
You have the natural logical thinking, of a consumer.
The problem is, all money making is based on "activity".
The good customers, who are "not costing" the insurance firm, are also "not generating any activity."
You might think, that the bad customers, who are always making claims, should be the ones they'd want to get rid of.
But, in fact, it's the opposite.
The bad customers, create the activity, and give the insurance firms "the justification" for "raising rates and premiums".
They can take the "statistics" to the government, and use that to argue they need to charge higher premiums. And the government lets them do that,
because of the "bad customers" making "claims".
As the "premiums rise", everyone makes "more money" (except the consumer), because the commissions and fees are a "percentage" of higher value
But, the premiums don't rise because of the good clients. The good consumers cause downward pressure on the premiums, and make it hard to justify
So, insurance cos really want a particular "mix" of bad customers and good customers. The bad let them raise premiums, and the good pay those higher
premiums, because, of course, they're "good."
I've witnessed this type of loyalty gouging in other areas too, like general banking, internet provider firms, etc.. but haven'
t a clue what justification those other businesses use to punish their long time customers, while giving all the breaks to the new customers. I've
just learned, as a consumer, I must "jump" ship from time to time, to keep my expenses down.