That isn't true. It's a law that insurance companies must have the money to pay claims. That's what reinsurance protects insurance companies against. People don't get paid because they didn't suffer a covered loss. I was a catastrophe insurance adjuster for Farmers insurance during Katrina and Hurricane Ike and the unpaid damages where often for damages not caused by a covered event: for example a destroyed wooden floor with no evidence of roof leakage would often be denied unless they had Flood insurance. We also have massive amounts of attempted fraud. People attempting to claim full value on a roof that was 20 years old. The amount of fraud in the property insurance business amounts to literally billions. Also denied claims are easily challenged with a public adjuster. I had plenty of debates with public adjusters and there were time when I did legitimately underpay a claim. Damage estimating is a very inexact science. There are dozens of variables such as material cost fluctuations, damage area material cost gouging, contractor shortages they lead to out of state contractors coming in charging higher than the prevailing rate for a given piece of work. The meme that insurance companies are evil is simplistic. The amount of regulation in that industry is astounding. I had to get separate licenses in 18 states. A few other states has reciprocity agreements but generally I had to pass exams just to step foot in a state in any official capacity. I am definitely not referring to health companies though.. Can't speak to that, but the property and casualty side of things isn't as terrible as it's anecdotally portrayed. During Ike, I wrote 12 checks per day which meant 16 hours a day on rooftops wading through debris and occasionally coming across human remains. Yet less than 5% of the claims I worked were denied and generally only partially.