What makes people scared of dealing with insurance companies?

People are of two types, risk averse and risk lovers, risk avers are tend to avoid risk that is why they seek to cover their expected risks by insurance companies, why the others do not scare about risks and under estimate the probability of being at risk, so they feel no need to spend money for uncommon risks

I will say that people are not scared of insurance companies. But due to lack of knowledge about the terms and conditions of the policy, people feel helpless at the time of claim. We often try to facilitate a customer while he is buying a new policy. But during the time of claim this assistance is often missing. This creates a negative image in the minds of the customer.

 

So i guess the customers are not scared but annoyed.  

I believe people do not fear insurance companies rather they are afraid of the Agents who sell the insurance policies as most of the insurance companies and banks have a very hard sell attitude from their Agents and many reward only new business rather than the quality of the sale and the number of clients or the experience.  Unless this changes from the Insurance companies side, people will have the fear of dealing with Insurance Agents.

In India many Insurance companies came in exist which are not registered under IRDA. Most of the people are lost their money investing(Purchasing Policies) into these companies. They frame their insurance policies in such a manner that less investment and more lam sum  Amount which are totally against rules of IRDA. Where as the genuine companies which are registered under IRDA cannot frame such type of policies which are against rules of IRDA. If they do so peoples are afraid to invest into that. So, this is the matter why the people are scared deal with Insurance Companies. 

I would like to qualify the question, because from where I come from, insurance companies are not being feared at.  In fact, they are being embraced and appreciated, because it is an excellent social mechanism in averting risks- be it medical, life, motor car, or property risk.

 

 I would rather say that because of the technicalities that insurance entails, people tend to veer away from insurance entities, especially in times of claims.  But it is something that is inevitable, because in order to be indemnified, you have to go thru the documentation, since this is the backbone of insurance- to prove your claim to be valid and lawful.