SW Indiana | Jackrabbit - 2/25/2021 19:34
You are correct in what you say but you are assuming the actuaries are pricing it correctly. At a $30 premium for the farmer and if govt picks up 44% they are essentially pricing it at $50 for $100 worth of coverage. So you have an every other year breakeven. Now think about your situation. Will you collect every other year at 95% coverage? For me it would only be a 20-25% chance of collecting. Hence I say they aren't pricing it correctly.
I don't believe the insurance companies are in business to make sure you get your premiums back, they're in business to make money. Anytime I have priced add ons it seems there is more profit for the insurance companies in the extras. Money better spent buying a higher coverage level (if your not already at 85%) than the extras.
Essentially your insuring a profit with the add ons, to me insuring (guaranteeing) profit at the end of the year shouldn't be cheap. |
ECO sticker shock
