Wondering why it is that you can’t buy health insurance just like you can buy car insurance? Car insurance and health insurance are similar and yet very different. They are both insurance products whereby the consumer pays a premium in order to transfer the risk of a costly loss to a third party. However, that is where the similarities end. While everyone needs health insurance from birth until death, a large percentage of people do not carry it because it is not mandated by law. However, car insurance is required in almost all states for car owners to carry. Therefore, a large majority of those who need it have it. Enter your zip in the box on this page to start comparing car insurance quotes or click here to compare quotes on health insurance!
The Standardization of Insurance Policies
Health insurance is rather complicated to buy because there is no standard health insurance policy that is required coverage, unlike car insurance in most states. In the majority of American states, car insurance is required by law for all car owners. A standard policy with at least the minimum amounts of coverage is needed. These liability amounts and coverage levels vary from state to state, however because they are standard within the state, it is easy for car owners to comply with the law. There are even high risk options for those who would otherwise be uninsurable, so that everyone has access to insurance.
The health insurance industry has much less uniformity than that of the car insurance industry. While many health insurance policies are similar, they are not the same. From company to company, you will find a great deal of differences between policies, making it difficult to compare them when you are shopping. The lack of state and federal requirements for a standard policy and no required universal coverage means that insurance companies have more freedom to offer the types of policies they want with the limits, deductibles and exclusions they choose. Car insurance is much easier to compare and choose from because of the standardization.
The Complexities of Risk
One important factor that makes it difficult to buy health insurance as easily as car insurance is the risk factor. Analyzing risk is much easier for car insurance because underwriters consider a very limited number of things. Driving records, past insurance claims, demographics, credit scores, location and the type of vehicle are the typical factors considered when setting car insurance premiums. It is easy to see how these things impact how much of a risk is involved when providing insurance for a driver.
With health insurance, the factors that must be considered are practically endless. Prior health history, insurance history, family history, geography, demographics, present health condition and more are amongst the multi-faceted factors that must be investigated for health insurance. In addition, correlations between certain of these factors and the actual risk they present for a person’s health change regularly depending on which study is being considered. Such complex factors make it time-consuming and complicated for underwriters to arrive at an accurate premium. These factors become even more complex when being considered for group health insurance.
The other aspect of risk that is different for health insurance when compared to car insurance is the fact that with car insurance there is the likelihood that many policies will have no claims paid out during a given policy term. However, health insurance companies pay out claims for almost all policyholders each year.
The Variety of Options
When you look at car insurance there are just a few options to consider. You must ensure that you comply with state minimum requirements. You will also need to decide on the amount of liability coverage to carry. Whether or not to get extra coverage like comprehensive, collision, medical payments, uninsured motorist and more must also be decided. You will also need to look at the level of the deductibles on your policy. Once you have made the decision of the type of coverage you want, the limits and the deductibles, it is very easy to compare car insurance quotes from different companies. However, it is not quite so easy with health insurance.
When you shop around for health insurance, you will find that there are differences everywhere. Individual plans usually differ from group plans. Plans from one company to another vary greatly also. Overall the plans that are available include: HMO’s (Health Maintenance Organization), PPO’s (Preferred Provider Organizations) and POS (Point of Service). There is also HDHP’s (High Deductible Health Plans), which are combined with the use of HSA’s (Health Savings Accounts). While these plans are carried by most health insurance companies, they vary so much in what they offer; the available deductibles, limits and exclusions; and how accessible they are, that it is very difficult to compare them.
Luckily, shopping for car insurance is a much less intense experience. With the help of an online search tool that finds the different options and presents them in an easy to use format, it can be done quickly and easily. When you are ready to get started looking for an auto policy to fit your needs, check out the car insurance comparison tool first or click to view quotes on health insurance. Why not start now?
