Why People Hate Insurance

When I attended my very first insurance training course in the year 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 major downer for a young guy getting ready to take on the world.

Looking back many 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 hate insurance and I came up with a list of my top three reasons.

My Top 3 Reasons Why People Hate Insurance

1. It’s Invisible and Intangible

When you buy electronics, car, furniture, books 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 your 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.

Insurance lives on the bottom two tiers.  Safety and survival is why consumers buy insurance.

Insurance agents must have the “heart of a teacher.”  There is no way to make insurance a tangible product, but good insurance agents can make insurance more enjoyable (did I just use insurance and enjoyable in the same sentence:) by helping you understand what you are buying, determining your personal needs, and being there for you at the time of loss.

Question: What has been your experience with insurance? Love it? Hate it? You can leave a comment by clicking here.

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

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  • I like the words “don’t like” vs the “H” word however.
    Nothing is worse than being “H*ed” especially if it is your occupation.

    • I don’t like the word hate either. It may be a little strong, but unfortunately there are people that feel this way about insurance. I hope the actual post helped provide a reason they don’t need to. Thanks for the comment.

  • Jackmail

    Because they only take money and do nothing~!!
    Someone post video on youtube broadcasting that too

  • Insurance Agent

    It’s not the theoretical concept of spreading risk and peace of mind that consumers do not understand nor hate about insurance. It’s the structural business model of lobbying the government to re-write the legislation in the favor of insurance companies and the practice of exploiting and leveraging these rules to underpay or not pay out legitimate claims to the very people they ‘claim’ to protect (no pun intended). All of this happens while the money saved from each claim not paid or underpaid trickles its way up to the pockets of CEOs. THAT is why people hate Insurance Companies.

  • accorn

    I hate insurance companies because they are parasitic crooks that think they don’t actually have to provide the service they are paid for. Fortunately people are becoming aware of this reality and going “bare” which means eventually all the private insurance (or I should say fake insurance) companies will soon implode and go bankrupt.

    • Accorn, sounds like you have definitely had some bad experiences. I know you are not alone. I can tell you have I have also seen insurance professionals and companies who have provided a completely different experience. I wrote this article about 5 years ago so I am glad others are still reading it:) I do agree that every profession and industry has a responsibility to work and serve with integrity.