Poll of the Day > If you buy more than one insurance can you claim as many times?

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Topic
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FBI: dont fucking move

What?

If you have multiple insurance policies, it just means you're covered more. Example: You rear-end someone and they file for bodily injury. If you only have one policy and it doesn't cover 100% of the physical injury + car damage, you might be pressured for helping make up the difference. If you have multiple policies, the difference insurance agencies could work together to cover the entirety of the cost.

I'm assuming this is how it works. I'm not an insurance claims adjuster or work in an insurance agency.

WastelandCowboy posted...

What?

If you have multiple insurance policies, it just means you're covered more. Example: You rear-end someone and they file for bodily injury. If you only have one policy and it doesn't cover 100% of the physical injury + car damage, you might be pressured for helping make up the difference. If you have multiple policies, the difference insurance agencies could work together to cover the entirety of the cost.

I'm assuming this is how it works. I'm not an insurance claims adjuster or work in an insurance agency.

Like, if you get Car insurance from, idk, CarFax? and the same coverage from ... AutoFax?

...
ehh

Would you get double the payback?
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I am an insurance underwriter. Most policies will have a coordination of benefits clause that dictates who pays how much in what order until you are made whole. For most kinds of insurance being made whole stops at 100%.

So a common example: an insured is 25 and still covered under their parents major medical. They are also covered under their employers major medical. The employer plan will typically pay first since the insured is primary on it. It is an 80/20 plan and pays 80% of the bill. The parents plan is also an 80/20 and could pay up to 80% but because you are whole at 100 it only pays 20%. The insured is out of pocket $0.

Will the total always be $0? It depends. The best advice is to take all policies and talk to a licensed insurance professional. They can help you understand if you are over insured or if you possibly can go past 100%.
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So that means insurance companies have no competition... they collab to reduce their own costs on people who want more coverage
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Lokarin posted...

So that means insurance companies have no competition... they collab to reduce their own costs on people who want more coverage

Uh, what? That's not what it means at all. This is no different than seeing multiple doctors to treat the same injury. No matter how many you see, the amount of injury they treat can't exceed the injury you have.
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Zeus posted...

Lokarin posted...

So that means insurance companies have no competition... they collab to reduce their own costs on people who want more coverage

Uh, what? That's not what it means at all. This is no different than seeing multiple doctors to treat the same injury. No matter how many you see, the amount of injury they treat can't exceed the injury you have.

Why can't I get 3~4 places of insurance so that when something breaks you can get 3~4x replacements?

EDIT: Am going to bed, would like to discuss further later
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This seems like something that the Jen girl would know, but I'm too afraid to summon her here. ><
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Lokarin posted...

Why can't I get 3~4 places of insurance so that when something breaks you can get 3~4x replacements?

I am super confused about what this kind of example has to do with competition between insurers.
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Veedrock- posted...

Lokarin posted...

Why can't I get 3~4 places of insurance so that when something breaks you can get 3~4x replacements?

I am super confused about what this kind of example has to do with competition between insurers.

Well, if you break a $1 vase and have insurance from 4 places - you should get your $4 claim, not have each place split for 25 cents
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Lokarin posted...

Veedrock- posted...

Lokarin posted...

Why can't I get 3~4 places of insurance so that when something breaks you can get 3~4x replacements?

I am super confused about what this kind of example has to do with competition between insurers.

Well, if you break a $1 vase and have insurance from 4 places - you should get your $4 claim, not have each place split for 25 cents

You're still not addressing how that fits into competition.
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Veedrock- posted...

Lokarin posted...

Veedrock- posted...

Lokarin posted...

Why can't I get 3~4 places of insurance so that when something breaks you can get 3~4x replacements?

I am super confused about what this kind of example has to do with competition between insurers.

Well, if you break a $1 vase and have insurance from 4 places - you should get your $4 claim, not have each place split for 25 cents

You're still not addressing how that fits into competition.

Oh!

If insurers can agree to how much they pay out on a claim they are in cahoots, which is against competition laws.
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Like, can you imaging buying 2 dinners and McDonalds phones up Dairy Queen so that they each give you half a dinner?

You'd feel ripped off
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Lokarin posted...

Veedrock- posted...

Lokarin posted...

Why can't I get 3~4 places of insurance so that when something breaks you can get 3~4x replacements?

I am super confused about what this kind of example has to do with competition between insurers.

Well, if you break a $1 vase and have insurance from 4 places - you should get your $4 claim, not have each place split for 25 cents

If you really believe that, there really isn't any hope for you.
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jsb0714 posted...

If you really believe that, there really isn't any hope for you.

Explain how in capitalism buying 2 of something doesn't get you 2 of something?
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Lokarin posted...

jsb0714 posted...

If you really believe that, there really isn't any hope for you.

Explain how in capitalism buying 2 of something doesn't get you 2 of something?

Your insurance.
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Lokarin posted...

jsb0714 posted...

If you really believe that, there really isn't any hope for you.

Explain how in capitalism buying 2 of something doesn't get you 2 of something?

Insurance isn't capitalism. It's robbery.

What you're talking about works, depending on the type of insurance contract.

Life insurance for example pays out a sum of money on the event of your death. This money often goes to your estate to pay for funeral arrangements and settle your outstanding debts. Anything remaining in the estate gets distributed according to your last will or governmental laws for inheritance if no will is made. But you can also have insurance contracts written to name a beneficiary instead of your estate so that person receives the funds directly. Which could leave some of your debts unpaid if the beneficiary wasn't a party to the debt.

If you take out two or more life insurance policies, these policies will both pay out in full in the event of your death.

However, normal insurance contracts aren't written to pay you a specified amount in the case of an event occurring. They're normally written to make you whole again. In other words, they will pay the expenses you incur should the event they insure occur. Once you are made whole, a second insurance plan can't make you more than whole as you don't have any additional expenses. As the other poster said if you have a policy that will pay at most 80% of your expenses. Then the second policy will only be on the line for 20% of your expenses to make you whole again.

The reason for these forms of contracts is they keep expenses down for the insurance company, allowing them to offer lower premiums and compete with other insurance plans. If one insurance company didn't try to keep these costs down, they would have to charge more in premiums to cover the greater expenses. Another insurance company could come in and keep those costs down and charge less in premiums. Thus only policies that make you whole would survive as they offer the same coverage for less without the loop hole allowing for claimants to be paid more than their suffered expenses. Most people don't want to pay for two insurance plans for this possibility of double compensation, so the market flocks to the cheaper plans that don't allow for it.

And it makes sense to do things this way. Future medical bills or car repair bills are variable costs. It is difficult to predict what the amount will be. Life insurance policies are fixed payouts, declared before the event they insure happens. The insurance company can prepare to pay those claims as the amount is known.

There are plans that will pay you a set amount for hospital visits. I remember my insurance company offered some simple plan years ago that if I was hospitalized I would receive a payout directly. I didn't feel it was worth it so I didn't spend much time looking into the fine print of what triggers the payout. But if you get multiple insurance plans of this sort they will all payout just like multiple life insurance plans. Though at that point it may be easier and possibly less expensive to just ask the insurance company for a higher payout in exchange for greater premiums instead of buying an entirely separate plan.

So it's up to you, take a contract that pays you a fixed sum that might be less but might be more than your bills. Or take a policy that will make you whole again (or at least mostly whole again if there's an X% maximum) but will never payout more than your expenses. Or get both plans or get neither. Either way, there's nothing noncompetitive about it.


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Lokarin posted...

Oh!

If insurers can agree to how much they pay out on a claim they are in cahoots, which is against competition laws.

https://kingofthehill.wikia.com/wiki/Hank_Fixes_Everything
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Zeus posted...

This is no different than seeing multiple doctors to treat the same injury. No matter how many you see, the amount of injury they treat can't exceed the injury you have.

It is different, though, in that insurance uses money as an intermediate representation of fixing the problem. You could hypothetically be paid repair costs multiple times, despite only actually needing one repair. Hence there are rules prohibiting it.
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Zeus posted...

Lokarin posted...

So that means insurance companies have no competition... they collab to reduce their own costs on people who want more coverage

Uh, what? That's not what it means at all. This is no different than seeing multiple doctors to treat the same injury. No matter how many you see, the amount of injury they treat can't exceed the injury you have.

What a bad example.
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No, and that's dumb you'd be paying double the price for something that may not even happen. Or if you get into a crash you caused your rates would double rise.
It's so costly for a what if anyway.
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Zangulus posted...

Simply put: youre only entitled to be made whole. Buying 4 policies does not entitle you to be made whole 4 times.

Thats called insurance fraud.

Dont like it? Who cares. Its not how the world works.

Also this.
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Lokarin posted...

If insurers can agree to how much they pay out on a claim they are in cahoots, which is against competition laws.

Actually, for major medical there is a government office, Center for Medicare Services, that publishes a list of prices called Usual and Customary that defines what being made whole means. It says for every CPT (procedure) code in each zip code what the price is between a medical professional and an insurer. Medicare and most carriers use that, however some carriers negotiate their own rates with certain medical groups. This is why some plans have a preferred provider network.

Auto insurance is a little different, typically the adjuster uses the blue book and price research to determine what being made whole is. The more expensive a property claim is the more research goes in, such as homeowners insurance.
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Energy Surge posted...

Life insurance for example pays out a sum of money on the event of your death. This money often goes to your estate to pay for funeral arrangements and settle your outstanding debts.

Fun fact: Life insurance payouts go to your listed beneficiary(ies) not the estate and creditors have no right to any of it to pay outstanding debts. Now if the beneficiary is also a cosigner on loans/debts (ie, credit cards, mortgages, etc), they will still need honor those payments or file bankruptcy but at no time can a creditor say you must use the life insurance to pay them.
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SunWuKung420 posted...

Energy Surge posted...

Life insurance for example pays out a sum of money on the event of your death. This money often goes to your estate to pay for funeral arrangements and settle your outstanding debts.

Fun fact: Life insurance payouts go to your listed beneficiary(ies) not the estate and creditors have no right to any of it to pay outstanding debts. Now if the beneficiary is also a cosigner on loans/debts (ie, credit cards, mortgages, etc), they will still need honor those payments or file bankruptcy but at no time can a creditor say you must use the life insurance to pay them.

Yeah, I mentioned beneficiaries in the last two sentences of that paragraph. I really shouldn't have said it "often" goes to the estate, "rarely" is the more appropriate term. If you fail to keep the beneficiaries up to date, and they are all dead at your time of death, then the policy's death benefit is paid to your estate. Which is obviously something you should not let happen as it then becomes subject to your debts and inheritance taxes before reaching your heirs.


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