Why People Can’t Stand Insurance and What You Can Do About It

By Brent Kelly

They may like you, your agency, or your funny commercial, but they don’t like insurance.

When I attended my very first insurance training course back in 2000, the instructor said something to us I will never forget.  He said, ”Congratulations, you get to sell a product that nobody likes, understands, thinks is too expensive, and only use when something bad happens.” Talk about a kick in the pants for a young guy getting ready to take on the world.

Looking back 13 years later, there is actually quite a bit of truth in what he said.  Most people I talk to about insurance don’t like it, don’t really understand it, always tell me it’s too expensive, and only get to use when they suffer a financial loss.

I started thinking a little bit more why most people have such disgust for insurance, and I came up with a list of my top three reasons.

Brent’s Top 3 Reasons Why People Hate Insurance

1. It’s Invisible and Intangible
When you buy electronics, car, furniture, books or anything else tangible there is a sense of excitement after the purchase.  You get to play with the electronics, drive the car, sit on the furniture, or read the book.  With insurance, you get an insurance policy. Of course, if your insurance agent is really good, maybe you get a coffee cup or an atlas thrown in.  How is that not fulfilling?

2.  It’s Complicated
Not complicated in the “Friends” Ross and Rachel, "I don’t think this relationship is going to work" kind of way, but in the "What in the heck are you’re talking about?" kind of way.  There are a about 100 different definitions, terms, exclusions and other provisions in most insurance policies.  Most insurance policies make really good insomnia medicine.  You need a good agent you can trust to explain most of this stuff.  That leads me to my third and final reason.

3. No Trust in the Insurance Agent or Insurance Company
Many people really feel that people in the insurance business are out to get them. Some are just paranoid, but others have had past experiences that justify their lack of trust. Whether it has been lack of service from their agent or not being treated fairly on a claim, bad experiences can put a very negative light on the insurance industry.

That being said, I see the critical importance of insurance products and have seen property, assets, and lives being able to be put back together after catastrophic events. Also, I have met  hundreds of  other agents, company representatives, and claims adjusters.  The large majority of them are good hard-working people who want to help and do what’s best for their clients.  It’s always the small minority that ruin the reputation and credibility of an industry.

You also have to remember where insurance falls into our buying processes.

Do you remember Maslow’s heirarchy of needs?

We don’t buy insurance for psychological needs, self-actualization, or peak experiences.  Although if you buy insurance to self-actualize, congratulations (you are the only one).

Insurance lives on the bottom two tiers.  Safety and survival is why most people buy insurance.  Buyers are protecting their hard-earned work, reputation, and making sure they can move on past a disaster.

 Insurance agents need to learn why their customers buy before they try to sell.

Most insurance agents have a list of product features, services, and other marketing garbage that does not resonate with the buyer.

Most buyers simply don’t care how shiny your brochure is or how long you have been in business. They care that you understand their concerns and that you will be there if they need you.

Question: Why do you think people buy insurance?