Why People Can’t Stand Insurance and What You Can Do About It.

Fact: People don’t like insurance.

They may like you, your agency, or your funny commercial, but they don’t like insurance.

When I attended my very first insurance training course back in 2000, the instructor said something to us I will never forget.  He said,”Congratulations, you get to sell a product that nobody likes, understands, thinks is too expensive, and only use when something bad happens.”  Talk about a kick in the pants for a young guy getting ready to take on the world.

Looking back 13 years later, there is actually quite a bit of truth in what he said.  Most people I talk to about insurance don’t like it, don’t really understand it, always tell me it’s too expensive, and only get to use when they suffer a financial loss.

I started thinking a little bit more why most people have such disgust for insurance, and I came up with a list of my top three reasons.

Brent’s Top 3 Reasons Why People Hate Insurance

1. It’s Invisible and Intangible

When you buy electronics, car, furniturebooks or anything else tangible there is a sense of excitement after the purchase.  You get to play with the electronics, drive the car, sit on the furniture, or read the book.  With insurance, you get an insurance policy. Of course, if your insurance agent is really good, maybe you get a coffee cup or an atlas thrown in.  How is that not fulfilling?

2.  It’s Complicated

Not complicated in the “Friends” Ross and Rachel, I don’t think this relationship is going to work kinda way”, but in the what in the heck are you’re talking about kinda way.  There are a about 100 different definitions, terms, exclusions and other provisions in most insurance policies.  Most insurance policies make really good insomnia medicine.  You need a good agent you can trust to explain most of this stuff.  That leads me to my third and final reason.

3. No Trust in the Insurance Agent or Insurance Company

Many people really feel that people in the insurance business are out to get them.  Some are just paranoid, but others have had past experiences that justify their lack of trust.  Whether it has been lack of service from their agent or not being treated fairly on a claim, bad experiences can put a very negative light on the insurance industry.

That being said, I see the critical importance of insurance products and have seen property, assets, and lives being able to be put back together after catastrophic events. Also, I have met  hundreds of  other agents, company representatives, and claims adjusters.  The large majority of them are good hard-working people who want to help and do what’s best for their clients.  It’s always the small minority that ruin the reputation and credibility of an industry.

You also have to remember where insurance falls into our buying processes.

Do you remember Maslow’s heirarchy of needs?

We don’t buy insurance for psychological needs, self-actualization, or peak experiences.  Although if you buy insurance to self-actualize, congratulations (you are the only one).

Insurance lives on the bottom two tiers.  Safety and survival is why most people buy insurance.  Buyers are protecting their hard-earned work, reputation, and making sure they can move on past a disaster.

Most insurance agents have a list of product features, services, and other marketing garbage that does not resonate with the buyer.

Most buyers simply don’t care how shiny your brochure is or how long you have been in business.  They care that you understand their concerns and they you will be there if they need you.

Question: Why do you think people buy insurance? You can leave a comment by clicking here.

Please note: I reserve the right to delete comments that are offensive or off-topic.

  • James C. Terrell III

    They are forced to buy it because of state requirements.

    • brentmkelly

      James, that is certainly true in a number of insurance lines today. I don’t think anyone likes to be forced into anything. That being said, I really can’t imagine anyone really justifying not carrying auto, work comp, or health insurance unless they are self insuring themselves. There is definite value in the products, even if the consumers don’t like it. I think it’s important for agents and other insurance professionals to help the consumers understand this.

  • brentmkelly

    James, that is certainly true in a number of insurance lines today. I don’t think anyone likes to be forced into anything. That being said, I really can’t imagine anyone really justifying not carrying auto, work comp, or health insurance unless they are self insuring themselves. There is definite value in the products, even if the consumers don’t like it. I think it’s important for agents and other insurance professionals to help the consumers understand this.

  • Linda Rey

    Well done! This was my cathartic attempt at venting the same sorta message:
    http://reyinsurance.com/articles/buying-life-insurance.php

    • brentmkelly

      Thanks Linda. You used the word pontificating in your post so yours is better:) I think all insurance agents can relate.

  • Alice G. Powell

    I think some people buy insurance because they understand how it works and how it will be able to help them when something goes wrong or something bad happens. There are advantages to purchasing insurance premiums although we might not use it now but in the future it could be very useful. I guess it’s all up to the insurance agents to make people understand how they can benefit from buying an insurance premium.

    SturdevantAgency.com

    • brentmkelly

      Great points Alice. I really do think it comes down to education. Thanks for your comment.

  • Martha Du’Sage

    When my clients get annoyed by anything they don’t life about insurance, “I tell them as an agent this is what I do, it’s not who I am.” Then I simply enlighten them to the facts and pitfalls. The integrity in which those things are presented are typically appreciated.

    • brentmkelly

      Martha, agreed. Integrity and education are vital. Thanks for being a teacher in the industry.

  • jennifer morgan

    This is a great article. People buy insurance to protect their assets, or because the bank tells them to. Hopefully, its protecting their assets, and they want to do the right thing! 🙂

    • brentmkelly

      Thanks Jennifer. You got it!

  • Wendy DeLay

    This is so true! Thank you for sharing!

    • brentmkelly

      You’re welcome Wendy!

  • Tom Larsen

    People have to know, like and trust you, which is probably why we do lots of philanthropic work and get involved in outside organizations. Not only are we social people but it is how the others get to know, trust and like us!

    • brentmkelly

      Right on Tom. Likability is huge.