Why is insurance so expensive?

Insurance is considered a good investment for most people as it provides some form of compensation guarantee during times of loss, illness, or damage to one’s property.  But over time, people have always complained that any type of insurance is expensive. Whether the coverage is for health emergencies, for one’s home or car, for example, insurance premiums have always been expensive for many people.

In the case of healthcare insurance, many people point to technology as one of the main factors in causing the rising cost of premiums.  Based on the research, medical spending has steadily increased over time with the funding requirements needed for new drugs and/or procedures, new medical equipment, and various other medically related explorations.  Although sustained medical research through technology has various benefits, the downside is that more and more money is needed for this purpose.  With increased medical spending and reliance on technology, insurance premiums in this industry are bound to go up.

For car insurance, on the other hand, there are also various reasons that make it very expensive for some people. For families with teenage drivers, for example, additional premiums may be charged because of the higher risks involved.  Teenage drivers are usually considered to be more likely to be involved in accidents, so the insurance companies may also charge higher premiums for these reasons.  Cars considered to be more expensive also command higher insurance premiums because of the higher costs to repair and/or replace them.

Overall, insurance is something that people purchase to protect themselves against uncertain future losses.  This means that an additional amount of money beyond one’s basic needs is required in order for a person to be insured in terms of his health, home, car, or other properties.  The thought of having to afford the additional expenses necessary beyond one’s  basic needs and/or personal spending preferences already makes some people think that insurance is an expensive investment.

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