What is insurance, really? Sure, it’s something we all buy for our cars and houses and for healthcare. Some of us get extra coverage for life or disability or recreational vehicles. We buy it because we don’t want to go broke in case of an accident. And, to be honest, a lot of us buy it simply because that’s what society expects.

But let’s look at the “nature” or “spirit” of insurance for a second. I’m talking about insurance’s “true self,” its platonic form, so to speak. I’m talking about what insurance was originally meant to be when it came into existence.

I once asked my late grandfather (a child of the Great Depression and soldier of the Korean War) what societal changes he saw in his lifetime. One of the things he mentioned was insurance. He told me that, prior to insurance, if a neighbor had a bad injury or their house burned down or some other catastrophe befell them, the community would rally around that person or family. Everyone would chip in to help build the new house or take care of the injured party or give whatever aid was needed. But the Twentieth Century brought lots of changes and we all became busier and more specialized, so instead, we started pooling our money into insurance companies. The idea was if one of our neighbors suffered a disaster, well, we’ve all thrown into the pot, so there should be enough there to take care of that person.

And that, at its core, is what insurance should be all about—taking care of one another.

But it doesn’t seem to be about taking care of our neighbors anymore, does it? Don’t get me wrong, there are plenty of claims that involve property damage or major injuries, and the insurance company does the right thing and pays what is necessary to put the injured party back on their feet (or as close to it as possible). However, there are also many, many times when claims are denied without good cause and litigation ensues, keeping attorneys like me busy and well-fed. There are a few reasons for that. Yes, there are fraudulent claims out there. Yes, there are borderline claims that should be examined closely. Bigger though, is the for-profit insurance company’s desire to boost its bottom-line. After all, more premiums collected and less claims paid equals higher profits. Add to that the opportunity of bundling all our premiums and leveraging those into lucrative investment opportunities, and how can you blame the carriers for wanting to keep the money on the market rather than pay it out to an injured party?

The nature of the system has changed over time. We’re not dealing with community funds meant for local folks anymore; we’re dealing with nationwide behemoths who employ armies of adjusters and actuaries and invest in derivatives and short sales and all manner of financial opportunities.

Insurance, like so many other aspects of modern society, has morphed into something it was never intended to be. Opportunities for wealth and power will do that to people, and large institutions are certainly not immune to it.

It is important to remember, these systems were made, intentionally, by human beings; so human beings have the power to rebuild them in their more humane form. We have the means to take care of one another, but we choose not to. The question, now, is whether we will change course or simply focus on our own bottom line and ignore the folks who get left in the wake of profit and progress.

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