Why You NEED Insurance: What Most People Don’t Realize
by Sumit Jyoti
Insurance. I’ll be honest, typing that word didn’t exactly set off fireworks in my head.
Insurance gets a bad rap — because of perception. Whether it’s the stigma about the insurance business itself or just a lack of understanding for how it actually works, insurance isn’t typically something that gets people excited. What’s interesting is that insurance actually isn’t boring at all, though — it all depends on how you perceive it.
Why Do We Need Insurance?
If you’ve seen The Lord of the Rings (and if you haven’t then it’s time to reevaluate your priorities), insurance is like the Mithril armor Frodo wears under his clothes. If Frodo gets cut, the sword damages the armor instead of his skin, therefore leaving him unharmed. In less dramatic terms, insurance is a way of managing risk.
When you pay for an insurance premium, you are essentially transferring the cost of potential loss from you to the insurance company. After paying the premium, the funds are then invested so they can grow and be available for payout once there is a claim. These claims can then be used towards multiple channels such as home insurance, auto insurance, health insurance and many more. That’s right, there’s Mithril armor for your house.
But there’s something that most people don’t realize about insurance…there are more insurance companies than you think.
In 2016, there were a reported 5,997 insurance companies in the the United States alone — 42% of which focused specifically on home and auto insurance. As a consumer, this can become a bit confusing. As of right now, the most common method of purchasing insurance is probing the internet to research as many insurance companies as you can find, followed by lengthy conversations with numerous insurance brokers until you find something that fits. There has to be a better way, and, I think there is. In fact, I’ve come up with two options:
Option 1: Just skip the headache and forget about insurance completely.
Option 2: Find a more efficient solution.
First off, are there really any repercussions of not having insurance?
The first and most obvious repercussion is the exposure to risk. As homes and vehicles tend to be the largest assets owned by most individuals, the decision to not insure them creates a large (and highly uncomfortable) amount of risk. Not that it can’t be done, but I think the peace of mind that comes from having insurance outweighs the money you’ll save on your monthly premiums. But that’s just me.
The second, and a more case-specific repercussion, is related to housing and auto insurance. In order to legally drive a car, insurance is a must. It is essential because not only are you managing risks related to you, but also to other drivers, other vehicles, passengers and pedestrians. On the other hand, you can legally own a home in the US without home owner’s insurance unless your home is financed with a mortgage. From the lender’s perspective it makes sense that your home should be protected in the case of unforeseen circumstances such as damage or robbery. After only a quick breakdown, it seems reasonable to think that having insurance is the wiser choice. Scratch out Option 1.
Option 2 mentions the possibility of exploring a different solution. If we backtrack to what most people don’t realize about insurance, it’s the oversaturation of options in the insurance market. Finding an insurer, getting individual quotes and speaking to multiple brokers seems like a tedious process. Is there a solution for this problem?
Enter Omnidya
Omnidya leverages artificial intelligence so you can spend less time finding the most cost-effective insurance deals or travel arrangements. Our platform automates the entire process so that Consumer Bot can shop for reputable insurance companies on your behalf. This not only delivers the best insurance and travel options to your smart phones, but generate quotes in as little as 60 seconds.
On the bright side, hours of research and broker interactions are instantly removed from the table. We free up time in your schedule that would have otherwise been spent investigating insurance companies. Pretty great, right? On the down side, you need to find out what to do with all this free time you have now.
