0:02 Is paying for insurance really just a
0:04 massive scam? In theory, insurance
0:06 should be really simple. You pay a
0:07 little money each month, the company
0:09 holds on to it, and when something bad
0:10 happens, they've got your back with a
0:12 big lump sum of money waiting to help
0:14 you out. So then, why isn't it this
0:16 simple? Why don't people trust insurance
0:19 companies? Why does everyone hate them?
0:21 And if insurance companies really are
0:23 doing some shady [ __ ] then how the hell
0:25 do they keep getting away with it? By
0:26 the end of this video, you're going to
0:28 know everything you need to about the
0:30 insurance industry and how for a
0:32 business built on trust, it's done just
0:35 about everything to lose it. Let's dive in.
0:37 in.
0:38 In theory, insurance is a beautiful
0:40 idea. Everyone chips in a little money,
0:41 and when something bad happens to
0:43 someone, that collective pot pays to
0:45 help them recover. It's like an
0:46 emergency fund, but for the entire
0:48 community. Let's say we've got 10 people
0:49 in our community. They all drive cars
0:51 and pay for insurance. When someone has
0:52 an accident, the insurance company has a
0:54 bunch of money waiting for them. So far,
0:56 so good. Sounds fair. But things get
0:58 messy pretty quickly because that
1:01 insurance company is not a charity. It's
1:02 not a government organization with the
1:05 sole purpose of helping people. It's a
1:07 forprofit business, which means they
1:10 only make money when they don't pay you.
1:12 Every claim that gets denied, delayed,
1:15 or underpaid is pure profit. So their
1:18 entire incentive structure is completely
1:20 upside down. They're not in the business
1:22 of doing good. They're in the business
1:24 of making money. And they make the most
1:26 amount of money when they don't have to
1:29 pay you. Quite literally a wolf in
1:31 sheep's clothing. They wear a facade of
1:33 safety and good intentions. While behind
1:34 the scenes, they're one of the most
1:37 profit- hungry and predatory industries
1:39 in the entire world. So profit hungry,
1:40 in fact, that these days they're
1:42 functioning more like hedge funds than
1:44 safety nets. Let me explain. If we go
1:46 back to our little 10person community
1:47 example, as the insurance company, we've
1:49 got 10 people paying us insurance
1:51 premiums every month. Let's say $100
1:53 each. And on average, we have one car
1:54 crash per month, and we pay out up to
1:57 $500 per crash. So in January, we take
1:59 in $1,000 from our customers. We pay out
2:01 500 for a single accident, and we have
2:02 500 chilling in our account. February
2:05 comes along, same thing. $1,000 in, $500
2:07 out. We now have $1,000 chilling in our
2:09 account. This bank balance starts to add
2:11 up over time. So, what are we going to
2:12 do? Are we going to leave it sitting
2:14 there in cash earning a pathetic little
2:16 interest rate from the bank? Absolutely
2:19 not. We're going to invest it. And so
2:21 insurance companies have become some of
2:23 the biggest investors worldwide. In the
2:25 US alone, insurance companies now sit on
2:28 around $9 trillion worth of assets.
2:30 Around 60% of that sits in bonds, very
2:32 safe, corporate and government debt.
2:34 Around 13% is in stocks. 9% is in
2:36 mortgage loans and property. And about
2:38 6% is in alternative investments like
2:39 private equity, hedge funds, or private
2:41 credit. So, not only do they have a
2:42 bigger pile of cash sitting in the bank
2:44 when they don't pay out claims, but they
2:47 also get to invest those dollars to earn
2:49 even more money. The logic for the
2:51 insurer is simple. The longer they hold
2:53 on to your money, the more they can make
2:55 from it themselves. Again, in theory,
2:56 this is all pretty fair. Rather than sit
2:58 in a pile of cash that's decreasing in
2:59 value due to inflation, let's invest it
3:01 and we'll have even more money to help
3:03 people in the case of emergencies. Well,
3:04 that's exactly where the [ __ ] hits the
3:07 fan. Because they don't pay people their
3:09 money to help in case of emergencies.
3:12 And here's how they get away with it.
3:14 Here's tactics these scumbags use to get
3:17 out of paying you your money. One,
3:19 delay. Delay, delay. The easiest and
3:21 most common tactic, delay and deny.
3:23 They'll lose your paperwork, ask for new
3:25 documents, request extra medical
3:27 records, or claim they're waiting for a
3:29 third-party assessment. None of which is
3:30 actually going towards verifying your
3:32 claim. It's simply to exhaust you until
3:35 you give up or settle for less. After
3:37 Hurricane Katrina, for example, tens of
3:39 thousands of homeowners fought insurers
3:41 for years trying to make claims, but
3:43 many eventually settled for pennies on
3:44 the dollar because they couldn't afford
3:47 the lengthy legal battle. Tactic two is
3:49 reclassify the risk. So, first they
3:51 write sneaky rules and clauses into the
3:53 fine print and then they use them to
3:55 screw you over. Oh, your car was stolen.
3:57 Well, technically your policy only
3:59 covered vandalism. Oh, your roof caved
4:01 in. Seems a lot more like wear and tear,
4:03 not storm damage. It's the oldest trick
4:05 in the book. After Katrina, thousands
4:07 were told their destroyed homes weren't
4:09 covered because the flood caused the
4:11 damage, not the wind. Health insurers do
4:13 the same thing. They'll reject a surgery
4:15 or medication as not medically
4:17 necessary, even if your doctor
4:18 prescribed it. And some companies even
4:21 use AI systems that autodeny claims in
4:23 under two seconds without a human ever
4:25 looking at it. Basically, anytime you
4:27 file a claim, there's a good chance your
4:29 insurers's first move isn't to help you.
4:31 It's to figure out what word they can
4:34 swap in to make sure you don't qualify.
4:37 Tactic three, use your data against you.
4:39 The scumbags have started calling it
4:42 personalized pricing. What it really
4:44 means is constant surveillance. Your car
4:46 insurance app, it's not just tracking
4:48 your speed. It tracks what time you
4:50 drive, how fast you turn, and how hard
4:52 you hit the brakes. You regularly drive
4:53 at night or in high-risk neighborhoods.
4:55 Congrats. You've just scored a 30%
4:57 premium hike. Same goes for health and
4:58 life insurance. They're now tracking
4:59 your fitness data, your medical
5:01 prescriptions, and even your social
5:03 media. Mr. Gym session last week, smoked
5:05 a cigarette last month. Awesome. Your
5:07 risk profile just changed. And it's not
5:09 just passive data collection. They
5:11 actively buy data from brokers. Health
5:13 insurers, for example, will purchase
5:15 consumer databases showing what food you
5:17 buy, where you travel, and whether you
5:19 pay your bills on time. Why? Because all
5:21 of that helps them predict how
5:23 profitable you are as a customer. And
5:24 let's say that data makes you seem
5:25 high-risisk. They're not going to
5:27 outright deny you. That would look bad.
5:29 They'll just quietly raise your premiums
5:32 until you can't afford to stay insured.
5:34 And they'll label it riskbased pricing.
5:36 And when all else fails, tactic four,
5:39 bury you in bureaucracy. They know you
5:41 don't have time or energy or money to
5:44 fight them, and they use it as a weapon.
5:46 Resubmit the same form three times, wait
5:48 on hold for 2 hours, get transferred
5:50 through five different departments. Some
5:51 companies literally have internal
5:53 metrics for how long they can delay
5:55 before a customer gives up. After
5:58 Hurricane Ian, thousands of homeowners
6:00 in Florida were stuck in this exact
6:02 nightmare. Months after the storm, they
6:03 were still waiting for basic claim
6:05 assessments while the insurance
6:07 companies quietly filed for bankruptcy,
6:10 leaving families homeless and unpaid.
6:11 You need to realize that this is not
6:14 some fringe tactic. It's an industrywide
6:16 strategy. There's even a phrase for it.
6:19 Delay, deny, defend. Delay the claim,
6:22 deny the payout, and defend the decision
6:24 in court until the customer breaks. And
6:26 if you do have the time, money, and
6:27 patience to take it to court, they've
6:30 got a full legal team ready to drag the
6:32 process out for years, knowing that by
6:33 the end of it all, you'll probably
6:35 settle for pennies on the dollar just to
6:37 make it stop. Which is tactic five,
6:40 lowball and settle. So once they've
6:42 exhausted you mentally and financially,
6:43 they'll come back with an offer that's
6:45 technically a payout, but nowhere near
6:48 what you're owed. Your $20,000 car that
6:50 just got wrecked, well, our independent
6:52 appraisal valued it at only 11,000. Take
6:54 it or leave it. Oh, your house burnt
6:56 down. Okay, well, the policy only covers
6:57 replacement cost, conveniently ignoring
6:59 the fact that construction prices have
7:01 doubled since you bought your plan. And
7:02 the sad thing is, most people take the
7:05 offer simply because they're exhausted.
7:06 But something that's always confused me.
7:08 How the [ __ ] do we know that these guys
7:10 do all this shady [ __ ] and yet they're
7:12 able to get away with it? Well, let's
7:12 find that out. All right, quick
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8:21 channel.
8:22 So, how the hell do they keep getting
8:25 away with it? Short answer, the system
8:28 is built to protect them, not you. For
8:30 starters, insurance regulation is a
8:32 complete mess, especially in the United
8:33 States. Unlike banks or airlines, which
8:35 are regulated at the federal level,
8:37 insurance companies are mostly regulated
8:39 state by state. 50 different sets of
8:42 laws, 50 different regulators, 50
8:44 different definitions of what counts as
8:47 fraud, fair, or unreasonable delay. And
8:48 so if a company gets caught screwing
8:50 customers in Florida, they just keep
8:52 doing business in Texas and California
8:54 and wherever else. Then we've got
8:56 regulatory capture. And this is the
8:58 revolving door stuff we touched on in my
8:59 previous video on Congress. The people
9:01 regulating the industry will receive
9:03 massive job offers to leave and beat the
9:05 laws and regulations they helped write.
9:07 And people within the industry get
9:09 massive dollars behind them, end up with
9:10 a seat at the table of the regulators,
9:12 and run the show from the inside. And
9:14 it's not just regulators. Insurance
9:16 companies spend millions in lobbying and
9:18 political donations every single year.
9:20 According to Open Secrets, the industry
9:24 spent over 160 mill in 2024 on lobbying,
9:26 more than oil and gas and more than
9:28 defense contractors. So, the people who
9:30 are supposed to be protecting you are
9:32 also taking campaign donations from the
9:34 people screwing you. And then there's
9:36 forced arbitration. Buried deep in
9:37 almost every insurance contract is a
9:39 clause that says you can't sue them in
9:41 court. You have to go through
9:43 arbitration, which is a private process
9:46 run by a neutral third party. Ah, yes,
9:49 the good old neutral third parties that
9:51 get paid by the insurance companies.
9:53 According to the American Association
9:56 for Justice, consumers win less than 20%
9:58 of arbitration cases. And then when the
10:00 regulators do put on their big boy pants
10:02 and find an insurance company, the
10:04 penalties are piss poor. State Farm once
10:07 paid 250 million fines for denying
10:09 hurricane claims. That same year, they
10:12 still managed to pull 3.8 billion in
10:14 profit. And so the cycle gets to
10:17 continue endlessly. Deny, delay,
10:19 lowball, and if you fight back, drown
10:21 you in red tape. And if you somehow
10:24 manage to survive that arbitration,
10:26 legal loopholes, and [ __ ] regulators
10:28 waiting right behind it. So yeah,
10:29 insurance is supposed to give you peace
10:31 of mind. But the truth is, it's an
10:33 illusion of safety. You're not paying
10:36 for protection, you're paying for hope.
10:38 The sad part is we need them because in
10:40 a world where hospital trips cost as
10:42 much as houses and natural disasters
10:44 wipe out entire towns, you can't not
10:47 have insurance. So, we keep paying month
10:49 after month. And that's the evil genius
10:51 of it all. They've built a system where
10:53 they win if nothing happens. And they
10:55 still win even if everything goes wrong.
10:58 So, is insurance a scam? Well, if
11:00 someone takes your money, promises to do
11:01 something in return, and then does a
11:03 bunch of shady [ __ ] to leave you worse
11:06 off when you needed the most? What the
11:07 else would you call it? That's all for
11:08 this video. Hope you enjoyed. Please
11:10 remember to like, comment, and subscribe.
