The "Game" of Twister

Trey Smith

The deadly start to the 2012 tornado season is forcing insurers to reconsider the risks of coverage in the most storm-prone parts of the United States and industry insiders say they may have to rethink how they handle the underwriting of the reoccurring natural disasters.

Unfortunately, homeowners may find themselves either paying substantially higher rates or not having insurance at all, as insurers try to manage their exposure to what is clearly a growing concern by diversifying geographically and tightening their standards.
~ from Analysis: Insurers Forced to Rethink Tornado Coverage By Ben Berkowitz ~

We're told incessantly that profit makes the world go round. While that may be true, in some instances, it doesn't seem to work so well when we talk about the insurance industry. The only way an insurance company can guarantee healthy profits is by limiting or canceling insurance for those who need it the most!

Put another way, it turns out that the main goal of insurance companies is to insure themselves against insuring us.

Take, for example, the health insurance industry. They want to insure healthy people because healthy people file far fewer and less expensive claims. It's a great business model. Your company collects millions of monthly or annual premiums and you don't have to worry about paying out too much. It makes for a stupendous bottom line!

But if some of those healthy people become less healthy -- through their own choices or circumstances completely out of their control -- then you've got a problem on your hands. You must give back some of your profits to pay for their medical upkeep.

What to do? What to do?

The easy solution is to kick the non-healthy off of the plan or to raise their premiums so high that the sick "voluntarily" leave the plan. Your profits are restored. Yipee!

In my mind's eye, the better solution -- better for all concerned -- is to remove the profit motive from the insurance racket. Universal health care would solve one part of the equation. Guaranteed government disaster assistance would resolve another aspect.

Look, we each suffer from travails in this life. It's part of the human life package. Not a one of us is immune. Sooner or later, most of us will need some sort of helping hand to deal with an illness, accident or natural disaster. When the profit motive arbitrarily is inserted into this formulation, it tends to mean that people who need the assistance the most are the ones most likely left out in the cold to face the issue alone.

Regardless of one's religious or philosophic moorings, I know of few belief systems that suggest it is moral or ethical to turn our backs on our fellow citizens. Since most of these belief traditions urge us to look out for each other, we need to craft mechanisms to put those beliefs into action.

If not, what is the point in ascribing to those beliefs?