Reply #20: This is the Insurance Mafia's Business Model [View All]

[Coastie for Truth]

PART 1 OF THE MODEL

a. Take the customer's money
b. Deny the claim when the insured event actually happens
c. Make the customer sue on his claim when the insured event happens
c. At which point the insurance industry screams "frivolous law suits" and "tort reform" and "avaricious trial lawyers."

PART 2 OF THE MODEL

a. Privatize profit
b. Socialize Risk (i.e., run to the government for a bail out)

This two part business model has been played out in Flood Insurance, Earthquake Insurance, Price-Anderson Nuclear Reactor Insurance, among others.