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Obama Has No Idea How Insurance Works!

Ed Morrissey at Hot Air has an interesting post this morning about a story Obama told yesterday about Auto Insurance.

Ed quoted Obama as saying:

When I was young, just got out of college, I had to buy auto insurance. I had a beat-up old car. And I won’t name the name of the insurance company, but there was a company — let’s call it Acme Insurance in Illinois. And I was paying my premiums every month. After about six months I got rear-ended and I called up Acme and said, I’d like to see if I can get my car repaired, and they laughed at me over the phone because really this was set up not to actually provide insurance; what it was set up was to meet the legal requirements. But it really wasn’t serious insurance.

Now, it’s one thing if you’ve got an old beat-up car that you can’t get fixed. It’s another thing if your kid is sick, or you’ve got breast cancer.

Hot Air correctly points out that Obama failed to buy (as in pay for) collision coverage for his car. He purchased only the state minimum, which is liability insurance. This covers you for damage you cause to others, but offers no protection or coverage for you or your vehicle. Morrissey correctly points out that Obama should have called the other driver”s insurance company, as he was rear ended. This is most likely true since Illinois is not a “no-fault” state.

But this highlights a deeper misunderstanding that Obama has of insurance in general. Had Obama actually purchased Collision insurance, he may have been able to have his vehicle repaired, although an old “beat up car” will likely be totaled and he would have received the value of the clunker, rather than a more expensive repair job.

Obama failed to understand what insurance he was buying. Just as he now does not understand what he is planning to force Americans to buy. To eliminate pre-existing conditions is like allowing someone to buy insurance after an accident and have their vehicle repaired. It is not a mean spirited policy by insurers to deny claims, it is a policy designed to keep premiums down by not unfairly adding wrecked cars or sick people to your group, which increases the cost for everyone.

Many states force insurers to cover various things at various levels. Additional coverage means higher premiums.

As an Insurance Agency owner, I don’t mind selling you a more expensive policy, as I work on commission. But the point is to get you the coverage you need at a price you can afford. Bells and whistles are nice, but you must pay for them.

You simply cannot get more coverage for less money and expect insurers to remain solvent. A.M. Best keeps an eye on the health of insurance companies, as does the Insurance Commission in Virginia. When a company falls to a low level, the state steps in. And in a worst case scenario, takes over the company to preside over the insolvency. At this point, all claims are paid by the other driver’s insurance, regardless of fault. So, the cost of failure is paid by everyone.

If Obama controls the premiums and mandates the coverage, expect insurers to begin failing, and expect to pay more for your insurance, even if your insurance company is financially sound. Which it won’t be for long.

And keep in mind that the reason Obama is pushing for Health Care reform is the high price of medical care.

This president has no experience in the insurance field, a complete misunderstanding of how insurance works, and no credibility at all on insurance.

Disclaimer: My insurance agency does not sell Health Insurance and this bill has no impact on my business.

About Tom White

Tom is a US Navy Veteran, owns an Insurance Agency and is currently an IT Manager for a Virginia Distributor. He has been published in American Thinker, currently writes for the Richmond Examiner as well as Virginia Right! Blog.Tom lives in Hanover County, Va and is involved in politics at every level and is a Recovering Republican who has finally had enough of the War on Conservatives in progress with the Leadership of the GOP on a National Level.

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    Tom White Says:

    Nothing is more conservative than a republican wanting to get their majority back. And nothing is more liberal than a republican WITH a majority.

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