| It's not a retail store that can check the inventory and if something is missing and wasn't sold it's counted as a loss. They conduct investigations of suspect claims. If the insurance companies find a fraudulent claim THEY DON'T PAY. Right, so they don't pay out on the claims they know are fraudulent. And they do pay out on unknown fraudulent claims. Even if it is a fraudulent claim and they pay, they don't know that. You're getting there, albeit very slowly. They don't know the claim is fraudulent, but it does cost them money. The end of the year they look at bottom line numbers. We made x amount of dollars. Oh not enough were paying out too much money on our policies better raise the rates. Oops, you missed part. To help you understand how things work, here are a few simplified formulas for you. Profit = Income - Expenses
Income = Customers * Average Rate
Expenses = Overhead + Legitimate Claims + Fraudulent Claims Fraudulent Claims increase expenses and thus decrease Profit. To meet Profit expectations, the insurance companies increase rates. Thus the cost of Fraudulent Claims are passed directly onto the rest of the customer base. This is an incredibly simple concept, I'm really in disbelief that you have yet to grasp it. Are you really defending insurance companies? You're smarter than that. If you think I'm defending anything, the you clearly did not read my post very carefully. I'm explaining why ripping off insurance companies is only hurting other customers in the long run. They're going to get their profits regardless of how high they have to raise rates to pay for expenses (which includes fraudulent claims).
Recursively Yours,
Kenny...
PETZ Member #5
You guys rock socks. (Click for pie-chart)
Computer Science is no more about computers than astronomy is about telescopes.
- EW Dijkstra
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15:26:32 12/27/07
