How to Boil a Frog…

Do you know that the insurance industry has mastered the art of how to boil a frog? Let me explain by using a recent example.

Last week Perr & Knight reported, “Auto and Homeowners Rates Increase Moderately in 2013.” Using that title from their press release I did a quick web search and found:

• The same headline  used by at least six different media outlets
• “Auto, Home Rates Rose Slightly” was another popular title

The point is no one reported that auto insurance rates are increasing at two-times and home insurance rates at 3.4 times the rate of inflation. Tornadoes in Oklahoma and floods in Colorado do not justify cost increases like this. The offsetting factors of a 9% reduction in driving over the last eight years and aging automobiles that don’t cost much to repair has a huge impact on reducing the costs to insurance companies. Those savings are not being passed on to the people.

People are not getting the true story of what is taking place in the insurance industry. Insurance rates are skyrocketing past the rate of inflation and it’s not being reported. The problem is the insurance industry has become so large they fund other large industries through advertising and fees. The result is a lack of independent watchdogs protecting consumers from powerful insurance companies.

Back to How to Boil a Frog

What does this have to do with how to boil a frog? To boil a frog, do not heat the water then drop the frog in. The frog will jump out. Put the frog in cold water and turn up the heat.

To insurance companies, you and I are the frogs. We buy a policy and then they begin ratcheting up the rates. When rates skyrocket, doubling and tripling the rate of inflation — like they have in the past couple years — companies friendly to insurers report a “moderate increase.” Everybody feels good, except your wallet.

To stop being boiled, join the Injured Money revolution now by connecting on social media.