The foremost reason (probably) is that their primary objective is so obvious: don’t pay. They’d actually prefer it if you never filed a claim. Or even thought about filing a claim. That would take their minds off making money on your money — the premiums you pay — which is actually the business they’re in: investing other people’s money to make money for themselves.
That’s why, when you don’t pay your premium on time, they either charge you a late fee (a penalty) or, if you’re in a risky area, just cancel your policy outright (after they’ve had time to realize that, someday, you might actually file a claim and expect to be paid). That’s an even bigger penalty, and it’s usually for doing nothing wrong… or anything at all.
But it’s the rules that seem to percolate down to the phone folks that thoroughly counteract rational thought. Here’s an example.
Sense and insensibility
My auto insurance “carrier” (a term that makes no sense at all) was actually very responsive when my own car was murdered by a kamikaze Kia. They “negotiated” with me over the “fair market value” and actually accepted my evidence that, locally at least, my car was worth lots more than they first wanted to pay. Then things got difficult.
Someone down the line said I couldn’t put the title of the car in a trust. They insisted that, in order to insure the vehicle, it had to be registered to an individual; two if my spouse would be driving it, as well.
I pointed out that they’d just sent a check — made payable to the trust — for the car that was totaled. I emphasized that they’d insured all of our cars that have been registered in the trust since the trust was established back in 1993. They claimed they hadn’t noticed. Or that rules have changed. Or that state law didn’t matter.
Law and logic don’t work
My wife has worked in estate law for decades, and she knew they were wrong. She knew that the legal protections that trusts can provide were established for very reasons. They refused to acknowledge those facts. So I said that, before any deadlines for terminating coverage arrived (which they said they’d do if the registration wasn’t changed), I wanted the point man for this perverse perspective to get an official opinion from the company’s corporate counsel. I heard nothing.
So, after checking with my own counsel, I took the permanent registration document to the DMV and changed the registration from the trust alone to my wife and myself and the trust. It didn’t offer quite the same legal advantages, but it was better than nothing. That was on a Monday.
Going in reverse
Two days later, on Wednesday, I got a call from the insurance firm’s point man. After fumbling for just the right words, he said, “I finally heard began back from our Legal Department, and they said that… you’re right. You can put the car in your trust.” There was a very long pause. “Mr. Altschuler?” the point man said. “Yes,” I replied, “I’m still here… and wondering how I can hurt someone over the phone.”
I explained that I’d already taken the vehicle out of the trust. He apologized. I told him that it took more than two hours. He said he was sorry. I pointed out I’d had to pay a fee to make the change, and he asked me to hold while he checked something.
When he came back, he said the company would gladly reimburse me. “And for the change back into the trust?” I asked. “Yes,” he said, without checking this time.
Time + Money = Inconvenience
Of course, now I need to make another trip to the DMV, but the process should go faster this time… mostly. When I asked about replacing the state-issued license plates with the personalized plates I’ve had for decades, I learned about another insurance snafu.
When I submitted the accident report to the insurance firm, there was a check box to indicate the plates had been retained by the owner. I checked that (and I have a copy of the form to prove I did). But they said the plates were destroyed. That means that the DMV has to reactivate the plates and, the staffer wasn’t sure, there may be a fee for that, too.