Why Insurance Doesn’t Work (For Them)
I'm willing to bet that you or someone you know has heard a “horror story” about insurance not working.
A building burnt down, but they only got half the payout.
A floor drain backs up, but they didn't have the right coverage.
And that's when people wonder: “Why pay all this premium if it’s not going to work anyways?”
Here’s the thing: insurance isn’t perfect. But when you invest the time to make sure it’s done properly, it works well. Over the years I’ve heard people make innocent remarks that suggest that insurance won't work for them. Don't let these mistakes ruin all the years of what you've built.
1. “Nothing has changed from last year”
It may feel like nothing has changed, but usually something has. Inflation, new equipment, side jobs, or a bit of revenue growth – they all matter.
If your insurance company doesn’t know what’s changed, you risk a partial payout or even a denied claim. A good broker will ask questions and help you determine what actually matters so your policies stay accurate.
2. “I’ve never had a claim, so I’m not worried”
Everything is fine... until you have a claim. That's when you find out what your policies are worth.
Some people get lucky and go a lifetime without a claim. And others, insurance ends up being the only thing between them and a very sad outcome. Past luck doesn’t guarantee future performance. The best approach I've found when it comes to insurance is "Prepare with care so you can build with confidence".
3. “I thought I was covered”
Insurance wording is complicated – exclusions, jargon, “All Risk” that doesn’t mean all risk.
It’s easy to assume two quotes are the same just because the limits look alike. Truth is, they’re not. Wordings differ between insurance companies so don’t assume. Ask questions until you actually feel the peace of mind insurance is supposed to bring.
4. “I do the same thing as them”
Copying what your neighbor or friend has for insurance is like copying their exam answers, only to find out your test was different.
Yes, compare notes. But your business isn’t theirs. Coverage needs to be built for you, not for someone else who does "essentially the same thing.”
5. “Insurance doesn’t work anyways”
If you’ve had a bad claim experience, I get it. You paid money for something you thought would protect you – and it didn’t.
Sometimes there just isn’t an insurance solution for a specific loss. But more often, the real issue is that coverage wasn’t set up right in the first place. That’s avoidable.
Don’t settle for blind trust because it feels like too much work. If your broker doesn’t seem to be helping you get to a place of confidence, find one who will. The cost of getting it wrong is way too high.
Final thought
Life keeps getting busier, and insurance often gets pushed until “later”. But please treat it like your lifeboat. If you only inspect your boat when there's a storm, that may be the day you find out it won't hold up.
Invest a bit of time now. Do a quick review and find out if you need a patch. You may need it sooner than you think.
Written by Tyson Klassen