Insurance always wins

November 15th, 2007

“The House always wins.” You may have heard it said about casinos, but not insurance. Then, why is insurance such a multi-billion dollar industry? Quite clearly the odds are in favor of the insurer. However, I think that it isn’t the odds that are in favor of insurers, it is the small print. This article in The Times UK shows “The 25 Most Outrageous Policy Exclusions.”

I’ve only had two experiences with insurance, and they were enough to convince me that I wouldn’t waste my money on it. In the US I would be considered irresponsible for it, I know. But, Honduras is another story.

Once I was driving to work, and a lady, who was coming from the opposite direction, suddenly turned left and crossed my lane. I swerved and braked, but I still hit the corner of her car. Don’t worry, I said to her, I have insurance. They’ll pay for it. Big mistake! So, I moved my car out of the way, so I wouldn’t hold up incoming traffic. Another big mistake. I needed to get to work, so we only waited about half an hour for the police to arrive; they can take hours. Very big mistake.

When I went to my insurance agency, and told them about the accident, they said they wouldn’t pay for it unless I was to blame. If the other person was to blame, they would charge them for the accident. They were aghast when I told them about my conversation with the lady. They said they would contact her and force her to pay. Also, since I didn’t wait for the police, they would not pay for the accident unless I went to court and defended myself before the traffic judge.

So I went to the Transit office, and they told me that I had to have waited for police to arrive, and I should not have moved my car. It did not matter if I would cause a line of hundreds of cars, or that I had to go to work. Otherwise, I would have needed to take pictures of the relative positions of the cars in order for them to reconstruct the accident. They set a date for my court appearance a few days later.

Now I had to call the lady. Immediately after the accident I had promised her she would not pay a dime. But, it turns out she is a lawyer! After working out the details of the situation, I realized I had to lose the case in order to keep my promise to her, because she threatened to sue me. So basically, I purposely did not defend myself, so the judge would rule in her favor, while she exaggerated the whole situation before the judge. I was furious, but could do nothing. I lost the case. Insurance did pay for repairs.

The repairs came out to be about three thousand Lempiras. In the years that I had paid car insurance, I had given them more than 50 thousand Lempiras. My car only cost 80 thousand! And they didn’t want to pay three thousand! I now refuse to pay insurance in Honduras! I’d rather buy the lottery, or gamble in a casino, I’ll probably lose less money.

  • La Gringa

    What a story! I’m not sure I understand why you felt you were at fault since she turned in front of you?

    I don’t have any experience with Honduran insurance but if it is like most other things, I’m sure that there is no consumer protection and that the insurance won’t be there when you need it (and deserve it and have paid for it!).

    Our car has been hit 3 times by taxis. We had to pay to fix it all 3 times, even though in one case the taxi driver drove a red light AND there were witnesses. He was going so fast that the impact almost overturned our car. I was only grateful that we didn’t have to pay to fix his taxi, too, crazy as that sounds.

  • Aaron Ortiz

    Well, it wasn’t my fault, but I thought insurance would pay for it anyway. Wow, that crash sounds bad! Were you hurt?

  • Anonymous

    Keep in mind, Aaron, you paid an insurance company to defend *you* for your mistakes and to indemnify *you* for your loss. In order to pick up the tab for the the lady, who caused the accident, she needs to pay premium to an insurance company to cover her mistake. And if she is found to be *at fault*, her company should also pay for your loss. .

    In NY, it’s mandatory to carry a statutory minimum amount of liability insurance. Think about it, if you hit someone and it turns out to be your fault, and you cripple them for life, isn’t it a good thing to have an auto insurance policy that could pay something of substance toward their loss?

    Most people’s experience with insurance is with fender benders, thank God. It’s a whole new ballgame when serious bodily injury is involved.


  • Aaron Ortiz

    OK, I think I get it…I should have defended my insurance agency against her reckless driving? But what would the insurance agency do if she did sue me and won?

  • Anonymous

    You’re getting the concept, you’ve reversed the roles, though.

    Your insurance company is there to defend you, not you defending them.

    In the US, an insurance company provides legal defense against a claimant’s suit against you. They will pay for your legal team in a *covered* liability claim, and if you’re at fault, will pay the award to the claimant. If you’re not at fault, then it goes away.

    Most fender benders, less bodily injury, will be worked out between claims people to decide who was *at fault*. Sometimes its shared – 50/50, 80/20, 60/40, etc.

    Other times it’s 100% at fault. Sounds like she may have been 100% at fault. Then she, or her insurance company, should indemnify you.

    Insurance companies are no different then restaurants. You can walk out talking about how great the product was and how great you were treated or how lousy the product was and how lousy you were treated. In NY, though, we have the NY State Insurance Dept. to complain to when necessary. 😉


  • La Gringa

    Aaron, El Jefe was driving and was banged up but not seriously. The car was a MESS and was never repaired properly.

    Kman, things so often work backward here. It’s no wonder that Aaron was confused. Businesses treat customers like a nuisance and think they are doing a favor to take your money.

    Those commercials I’ve seen lately on TV about insurance only covering a crash into a ‘Ficus’ tree and no others is the type of coverage I would expect here. There are just no consumer protections whatsoever.

  • Anonymous

    Reminds me of an old *Odd Couple* episode when Oscar tells Felix he purchased apartment insurance for them. When Felix asks where the policy is Oscar tells him he bought it on a handshake. 🙂


  • Fon

    Thanks for the information on topics.I was excited for this article.
    Thank you again.

    Insurance information for good ideas.

  • Anonymous

    Who would think anyone would get excited about an insurance article?

    BTW, Aaron, La Gringa, were your claims ever settled with your insurance companies?


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