For a lot of folks, insurance feels like some sort of perennial punishment from their parents. “Because you can’t keep your room clean, you have to pay hundreds of dollars a month for this thing that you will (hopefully) never use.”  It is some sort of edict enacted from above, over which we have no control.

That sort of relationship with insurance may leave a person feeling out of control and a bit taken advantage of. And I’m here to tell you, it doesn’t have to feel that way. I’m here to let you know you have options.

The biggest issue as I see it is that we have never been given the proper perspective on insurance.  We were never even given the chance.  You want a car, get insurance.  Nobody tells you the “why.”  You want a loan to buy a home?  Show the bank your insurance policy.

To understand the “why,” I try to get people to see it from a perspective without insurance.  Ignore the concept, pretend it doesn’t exist.  You know that house you bought with the 20% down payment you had saved for over a decade to afford?  If it burns down, where will you get the money to rebuild it?  Will you just go back to the bank for another loan?  Of course not.

What if there was a company out there that you could give a little bit of money to each year, that would then cover the cost to rebuild your house?

That’s “why” insurance.

The thing about life is, the more we have, the more we have to lose. The more we have, the more opportunity there is for that “thing” to become damaged, or cause damage to someone or something else. Society teaches us very clearly that we are supposed to gather as many of these “things” as possible.  Such is the definition of a successful life.  But society fails to educate us about the large amount of responsibility (read: liability) that comes with all of those things.

“So,” you ask, “What are those options you talked about earlier?” Well, one option is not to have any “things.” (OK… I never said you would like the options). I, personally, could not survive without my car. So now what?

If I choose to have things in my life, I am also choosing to take on the responsibility of those things: repairing them when they are broken, replacing them when they can’t be fixed. And in just living I, being imperfect, will not only suffer accidents myself but sometimes (gasp) cause accidents around me. I can either pay for those things out of my own pocket or enter into an agreement with an insurance company.  The insurance company takes on the large sum of money I am exposed to in exchange for a smaller sum of money each month or year. 

When something unexpected happens, insurance helps limit the effect to something we can absorb.  It takes unmanageable financial burdens and makes them manageable. Does this sound like punishment anymore? Not to me. Now it just sounds like the best option.

Michael Berg ins President & CEO of Berg Insurance Agency and may reached at michael@berginsurance.com.