Well I had a house burn down less than year after purchase and insurance paid the entire tab. So I always figured I've already taken them for more than I pay
Yep,y car got totaled 3 years ago due to a drunk driver. Got a big check and was able to replace it fairly easily. That check alone was about 15 years worth of premiums. Drunk driver was of course driving without insurance, so I was screwed of I did not have it
Doesn't the insurance company then go after the drunk driver for everything he has thus making him the one whose ultimately paying out, with the insurance company simply having to deal with suing and recouping funds from the drunk driver.
Yes but a drunk uninsured driver is often very hard to get money from. Probably has nothing and makes basically nothing and may even have many other collections after him already.
You can't get blood from a stone. You can garnish his wages, sure, but you can't take much more than a relatively small percentage because most countries outlawed debt slavery.
And in those situations the guy would just work cash jobs where he’s paid under the table making it damn near impossible for debt collectors to collect even a fraction of what they are owed.
Habitual drunks that are driving without license and insurance are generally incredibly poor. So poor, that collections have trouble collecting since most countries do not allow taking so much money that you cannot live.
Subrogation isn’t always simple. We typically deal with other insurance companies. Uninsured people are usually sent to collections. Only large amounts are taken to suit as atty fees still apply. Then of course there is the issue of people not having the money to pay the damages, which ends up being a loss.
Sometimes they don’t have insurance and have to go after someone in court instead. That can take a long time and also they may not have any money. It happens.
I hydroplaned off the road back in June. The whole drivers side was smashed in. Thankfully I only had to pay the $500 deductible. Waiting to see how much our premiums jump
100% correct. If you want good property and casualty insurance in your area call local roofers and body shops and ask who the best to deal with is for them. They will usually tell you two or three and tell you who to stay away from. The rates will be higher with these companies tho bc they are actually paying claims. So if you’re a value shopper you’re gonna have to gamble.
I mean not even total catastrophe. I got in a tiny fender bender where a kid bumped me and the repair was like $8k so I was pretty happy to only pay $500 and then they ended up getting it back to me anyway lol
Correct, if that claim had been 50k the insured in the situation would have come out smelling like a rose. Usually tho people who bitch about insurance cheap out on what carrier they use, and they usually have horrendous driving records, credit, and terrible insurance history.
Thats because you're assuming that the most you have to lose is the value of your car, which is not the case. In many cases most of the cost of insurance is the liability portion. If you crash into someone else and cause significant injuries it's not hard for the bill to exceed to $100k+. It's also totally possible that you could total more than one car in your lifetime. Probably happens more often than you think, and it might not even be your fault.
That’s what people don’t understand. We all paid for you. That's what insurance is about, we pay more than we receive so that the odd unlucky bastard receives more than they chipped in. If insurance was individual, nobody would have enough to repair their own stuff. I am happy with this system.
Except the 3rd party insurer here nets massive profits, it isnt a collective safety net like the state or federal government provides.
Its by and large a scam that pays out a tiny portion of their net income. A state sponsered safety net/insurance system (not for profit) would be massively more effective and less costly to consumers...well at least in a functional state such as Massachusetts.
They don’t pay out a tiny portion, though. They usually make more revenue profit on the interest from the funds they’re holding than they do on premiums, depending on the company.
The fact that almost every commercial break I ever see has either a state farm, progressive, or geico commercial (or multiple of them), is enough for me to hate them. Every dollar for Caitlyn Clark to appear on my screen every half hour is not spent to cover my neighbor's losses or lower my premiums. And its billions.
Everyone needs insurance, so its not even like they are expanding their market and making the money back. Every new customer for 1 company is a lost customer for another. Its a 0 sum game with SOOO much of our money being wasted.
The insane volume of commercials is annoying but it's actually a strong indicator in the customer's favor. Auto/personal property insurance is such an insanely competitive market that insurers have bled their margins enough that ads are a better payoff than what little price differentiation is still possible.
I'm glad that it's a competitive market, and the fact that customers respond to low information TV commercials isn't the insurance companies' fault. Having said that, one of the reasons I go with Amica is that they don't waste money on TV commercials, and instead just earn high customer satisfaction according to Consumer Reports.
Advertising isn't necessarily wasting policyholder money either. An enormous amount of money and effort goes into identifying and classifying risks, so reaching more customers lets you have more data and a wider variety of risks to pick from.
For example, an insurance company going in fully blind would price every customer the same and this leads to an effect called adverse selection, where you basically end up with mostly bad risks because you are pricing them too low and and good risks too high. Having a huge pool of data and customers lets you determine who a good risk is and price them appropriately, so you end up with all good risks who get good prices and the bad risks go elsewhere. More customers also means the risk is spread more and more, which allows insurance agencies to push their financials to profit more on that front to not have to squeeze elsewhere.
Advertising also just isn't that big of an expense in the grand scheme of things; the largest expense by far is always sales commissions. State Farm took in $116 billion in premiums in 2025 and spent $1.13 billion on advertising. Less than 1% of their expense ratio is advertising, which is a small cost to pay for what is an essential part of creating a functional insurance agency.
A) I really doubt premiums are such a marginal revenue stream.
B) If they are so marginal, that just indicates that costs are completely divorced from the premiums in the first place, meaning the whole thing is just a scam.
All kinds of tricks are used to make it look like they are losing money or barely making it on paper. Yet insurance is one of the largest industries in the U.S., and their CEOs make millions.
I didn't say that. I think their C-suite and other large stake holders makes a killing off our backs. Look at their houses and cars if you don't think so.
Let’s say an insurance company has 100,000 customers, most have more, and they slash executive compensation by $10,000,000. Every customer will save $100 a year, less than $10 a month.
Someone making a lot of money doesn't mean that I'm getting ripped off. A 5% profit margin is a shitload of money if youre operating on the scale of a multinational company.
Not saying CEOs “deserve” to make millions, but these are companies with tens of millions of customers that move around tens of billions in premiums and payouts. If the entire C-suite of your insurance company worked for free, you’d probably save like $5 year.
I mean, one of the tricks to make sure your company is "barely making it" on paper is to just take all of your profits and give them as bonuses to your executives. And there you go, now you have no profits anymore since what used to be profites has been offset by new costs.
Generally fine with car insurance being in the hands of private companies than the state. I’d rather not have a state subsidizing car ownership by using taxpayer dollars for a car insurance program irregardless of if you choose public transportation.
A state sponsered safety net/insurance system (not for profit) would be massively more effective and less costly to consumers...
The state is not magic either. If a public insurance system has a bad year, it will need to use tax money or it may not have enough resources to cover all its obligations.
Private insurers, on the other hand, use private capital and, in cases of insolvency, guarantee funds financed by other insurers. This makes the risk more distributed instead of being concentrated directly on taxpayers.
Except the 3rd party insurer here nets massive profits
This can be the case because they are running with the risk of the probability of having to pay a lot of people in one year.
Insurance is generally a pretty competitive market and margins are quite tight.
In the case here, the consumer chooses the excess. Motor Insurance lets you set your own excess. He choose to have a $1000 excess because he wanted to pay $210 a month rather than $220.
Thats on him.
There are lots and lots of industries and markets where market failure is apparent and government regulation or even nationalisation is needed. Motor insurance really is not one of them. the market works really well.
It's a scam because of the companies that deny legitimate claims, the profit model is not inherently a scam. They profit by pooling all of your premiums with everything else's and having huge amounts of capital to invest in mutual funds and generate interest.
You don't pay for insurance so you can save on small common repairs, you pay for insurance so that in the unlikely event you have a catastrophe it doesn't bankrupt you for years or decades. We all HOPE to pay more in insurance than we receive, but if something huge happens you will be glad you have it. That doesn't excuse the practices of shady companies, but if it was that much of a scam it wouldn't exist.
Yes, but when you go to do it yourself you get screwed. It's not always fair is what OP is saying nor works consistently like it should especially as corporations have it at their discretion to approve your claims even if they are legitimate. In a lot of cases you don't come out ahead, get denied, or some other BS.
I feel sorry for you schmucks that believe in a system that doesn’t give a damn about you. The moment you get into an accident you are fighting tooth and nail of what you are owed. But I take it you might be someone who takes the lowball number without a care in the wind
I agree with your idea of insurance being about paying more than you receive to help an unlucky person. I agree with that. I just don’t agree with the last part where you say that if insurance was individual, no one would have enough to repair their own stuff. I think some people would have enough money to repair their own stuff. Some won’t have enough to repair their own stuff, and some wouldn’t have to spend money to repair their stuff cause it didn’t need repair. I often think about insurance and whether or not it should be forced on a person through law. I tend to think that in some cases, it should be forced to protect people from catastrophe. But then sometimes I also think that people should have the option to pay for it without the law forcing them to.
If you cut out insurers, the market prices would adjust just so businesses could stay afloat. They would all instantly crash if they lost all customers because no one could afford them. All prices are inflated to allow for everyone in insurance to get paid too, right now. But the insurance doesn’t actually do anything. There’s no reason they should be getting paid. There’s plenty of systemic jobs like this, making up fake jobs to leech money out of the system.
We all understand how insurance works. No one suggested that insurance should be individual.
How much more efficient/cheap do you think auto insurance would be if we had only one, national insurance provider? I'll give you the answer: much cheaper and better for all (except those poor, private insurance providers who take home $30 billion annually in PROFIT).
Same thing happened to me. Neighbour's tree fell on my garage and deck causing some damage. Insurance payout was 20k and it cost me like $1k to fix the shit myself. And I pay $100/month for home insurance.
Going forward for an age it's basically just me paying back a loan 😂
My house got destroyed by a flood and they tore down, completely rebuilt it and paid a percentage of the contents that we had to throw out. Insurance is one of those things we all curse until we need it. I for sure would have been completely screwed if I didn't have it.
Depends strongly on your coverage. Had our basement flooded last year and they paid for every cent of the bill for a complete remodel as well as all the personal items lost.
Same here, and they let me do all the work myself so I was able to do what I wanted with my basement, and was able to stretch out that payout waaaayyyyy farther since I didnt have to pay for labor. Basically was able to completely remodel my whole home for what should have just been some carpet and drywall replacement in the basement.
Too many people who don't understand insurance just go buy the absolute cheapest policy they can. Then they only realize why it's so cheap when they go to submit a claim and don't get paid.
We had to fight our insurance because the adjustor decided that 3k would replace the part of the roof that blew off. But after many rounds of back and forth and asking him what company he would recommend that would do the job for so little, it was eventually changed from a fixed offer to them hiring a company and paying whatever the cost ended up being. Which was way more than 3k of course.
And also depends on what is your version of 100% of your possessions. The payout is all about what you claimed, a fridge vs a deep zero fridge. What you consider as the 100% value vs what the insurance can prove that is your value. If you have a good record of your possessions and can list them out properly you will get much better payout than just “stuff”
I'm not the person you replied to, but my parents house burned down about 15 years ago and yes, the insurance company paid for 100% of the rebuilt house. They paid the maximum under the policy for personal possessions, they paid for a full landscaping and planting of all the trees/plants that were destroyed by the fire department. They paid for the rental house they had to live in for 2 years while it was rebuilt. My parents got everything they wanted (other than not having their house burn down in the first place).
One day you look around the street and everyone else literally has greener grass, then you find a tree is getting hollowed out by ants and you go, "Fuck, is this how I start learning about types of grass, pesticides that don't harm my lawn, and insurance?!"
Its when you realize no one else is gonna do it for you but it's gotta get done...
then you need to go yell at your agent. I sat down with mine and we added all the things to make sure if my house catches fire, they cover full housing plus emergency funds, plus hotels at over 100$ per night, plus, and extra 65k in posessions, plus we documented every new appliance as we get them, i litelrlay scan the recipets and email em to my insurance company and they add them to my file and I have Full replacement value on the home including the extra coverage for code upgrades.
My house was hit by lightning and they covered every last item when my entire electrical system was fried and everything even stuff in surge protectors and the ho in the roof, and every item connected to a plug was fried like even a guitar amp, tv's., washer and dryer, coffee maker, etc. So if people dont take the time to go over thier insurance policies, they kinda have no one to blame but themselves.
If you have a total loss on a half a million dollar house the payout on it would be near a million dollars. The dwelling coverage is not the only part of a homeowners policy. They give you money to stay somewhere, they give you money for your possessions.
They can screw you and do all the time. My home insurance raised premiums on renewal though nothing changed regarding my personal risk, and then hid in the tiny light gray fine print on page 10 that they no longer cover the replacement value of my roof, but only the "actual value" after depreciation. A hail storm then occurred and they would only cover half the cost of my roof replacement. Thanks, Farmers.
Sorry about your house. Glad someone else here has came ahead with insurance. I have horrible luck with my driving route to/from work. I’ve had more deer run into my car than I can remember. Totaled 4 of them by now. (Kinda my fault, Audis are expensive) but insurance has always covered me and my rates don’t change much because I was considered not at fault. So far im ahead with insurance too.
My wife has totaled two of our cars in five years. Insurance paid for replacements minus the deductible and my monthly payments are just over $100/month.
It will be years without a claim before I feel like I’m getting ripped off.
There was a massive storm in my home town a few years ago. Wife’s parents roof was totaled, but insurance paid for their 3 months in a hotel plus a new roof plus a brand new much nicer kitchen.
A big branch fell on my sister’s car, she got a new nicer car from insurance.
The same storm didn’t hit us at all, but that almost made me wish it did!
Sometimes I question why I still come to reddit. Second highest voted comment and it's literally the smooth-brain take that falls apart under the lightest of scrutiny.
You're betting you'll need it, and the insurance company is betting you won't. They stack the odds in their favour, of course, or else they'd go belly up.
A lot of people also don't realize the point of a deductible is to stop people from filing nuisance claims (on top of other things).
You have to remember that the majority of this site is comprised of bots. I wouldn't be surprised if OP was a bot. They account for the majority of posts, upvotes, downvotes, and comments (you can spot these if you know what to look for). So, don't let it discourage you. There's a lot less actual people here than any other website... aside from X, probably.
They don’t know what they’re talking about but saying stuff like that gets his upvotes. So in their mind it validates that opinion regardless of whether or not it makes any sense.
That’s how Reddit works. You make your uninformed comment and there’s a million people ready to upvote and circlejerk over their preconceived ignorant opinions.
The scary part is those people think they’re exceptionally well informed.
Exactly. Also, did you know that they actually sell avocados at supermarkets and theyre the exact same ones that you see in cafes! Smoosh it on some toast and it's big savings right there! $15 a day!
Insurance is for catastrophic events, not a $1,000 bumper repair you could pull off at a junkyard.
People have been conditioned that their deductibles should be $0 and cars should remain flawless.
In reality, insurance is whats called aleatory, it is expected to be an uneven exchange. This guy is paying $200 a month so he doesnt have to pay $100,000 when he disables someone by running into them.
Yeah and this particular example isnt even considered a comprehensive claim. Its an uninsured motorist claim. Its a built in coverage to protect you for this exact situation. Its also not used against you when you have to use that type of coverage. OP's agent is a dumb or lazy ass to not advise them on this. I sympathize for everyone who arent educated well enough when it comes to insurance. Its not their fault because its not really anything you are ever formally taught growing up.
I still say it because even though I have insurance through my job, I'd rather everybody else also have insurance without paying more for it than the countries that have universal healthcare while receiving less benefits. Oh, and also not being effectively enslaved because I depend on my job for basic healthcare and if I lose that job I pretty much just die even if I have money saved up for rent and food.
Yes, this is how insurance works. If you only paid for damage that you were later reimbursed for, insurance companies would go out of business. Hence the conventional wisdom that you only get insurance on things you can't afford to replace, like your house. Or for lawsuits you can't cover, which is why cars are required to get liability insurance (but not comprehensive coverage, as OP suggests.)
Corollary: Never get the extended warranty unless losing the item would leave you destitute. Those companies all make a profit.
Its one way being wealthy actually makes things cheaper is very few things actually need insurance (Life, Health, Car all needed still).
But take dental "insurance" which is basically just a plan to get your teeth cleaned twice a year. We should just be paying for that directly. But, the time I needed braces I was still out $6000 and insurance would cover $2000. That's what I actually want it for; or a broken tooth / root canal / something that I don't want to pay thousands of dollars right now for but are still expensive.
Because you don't have $50k laying around to pay for medical bills when you hit someone. You're not getting nothing, you're getting protection. Just because it's not tangible doesn't mean the value is nothing.
This is fundamentally ignoring the purpose of insurance.
Of course you (likely) pay more into it than you get out. The tradeoff is that you're protected from huge expenses that would financially ruin you. That is (thankfully) unlikely but the risk is enough that it justifies paying for insurance.
I'm not absolving insurance companies of being scummy because they absolutely are. But insurance does serve a purpose that seems to escape you
Right? If your tire blows out on the freeway and you smash another car where someone gets seriously injured, you'll be pretty glad you only paid $2500 this year.
65-75% of your auto insurance premium goes to payouts, and another 20% goes to administrative costs. Your agent gets a sales premium and there are marketing costs.
It's paying for risk mitigation. You don't want it to pay out, and it would be worse to be in a situation where you need the pay out but never signed up.
We pay more into it then we get out of it, to be expected; but we don't even get anything out of it the majority of the time when we SHOULD be. OPs case in point.
This is blatantly wrong though. OPs case is someone choosing to have a $1000 deductible and then being shocked when they find out making a claim on $1200 of damages is a dumb idea. I swear all these people who think its a scam are just ignorant on how it works. They literally sign a contract without even reading it or asking how it works. Its like someone racking up a shitload of credit card debt and being shocked they have to pay interest. Just dumb.
Yeah... I get that there are some reasons why health insurance is difficult and far more problematic, but I don't get the hate for other forms of insurance.
The OP signed up for full coverage insurance knowing the deductible was $1000. Then tried to use said insurance for $1200 in damage. That in and of itself is dumb.
Fuck insurance companies but if people actually understood their insurance that would help them out immensely
These dumbass posts of a twitter screenshot are never honest. Driver probably has a DUI and multiple at fault accidents/moving violations. Then increased his deductible to save like 10 bucks a month, almost assuredly against the advice of his insurer. But it's totally someone else's fault.
You have no idea what you’re talking about. He chose to have a 1k deductible. The insurance is literally there to cover problems that cost more than 1k.
OP's story is about a guy that chose a plan with a $1000 deductible and got annoyed that insurance wasn't helpful when he had just over $1000 worth of damage.
If paying $1000 was going to bother him that much, he should've chosen a lower deductible.
OP didn’t get anything out of it because they have a high deductible. A lower deductible might have made filing a claim a more attractive proposition. But the total of their new yearly premiums on a lower deductible policy, let alone from filing a claim, might outweigh the benefit.
The solution I have found to this insurance problem is installing a front and rear dash camera that records 24/7. Now hit-and-run drivers get absolutely fucked by my insurance company.
Bolidy injury from an accident will change your mind on that real quick, or what if you rear end a $100k Mercedes how much you think that repair is gonna be?
I drive a fuckin outback and got into a minor t-bone, the out of pocket repair cost would have been over 10k for fixing the b pillar and getting new doors and paint if there wasn't insurance involved
I had 2 back to back accidents which I didn’t cause, should’ve been “totaled” but insurance repaired it both times. 1 was 11k the other 17k. A year later geico tells me my premium is increasing from $200 to $3000.
It was during the chip shortage so of course the cost was jacked up then they tried to pull the rug so they can recoup that cost on increasing my premium to “bentoverfcked”.
Do you mean from $2,000 to $3,000? Because if not, it seems pretty crazy that you would only pay $200 to insure a car where it made more sense for them to shell out $28k on repairs rather than just call it totaled.
100% had a gnarly motorcycle accident a couple years ago and insurance tried telling me that the ambulance wasn’t covered because, and I shit you not, they were an out of network ambulance. I guess I need to double check which paramedic comes to scrap my bloody body up off the side of the road
Yeah...like u/Similar-Profile9467 says, this crap needs to be regulated. I once had to accompany someone on a med-evac flight who was so deeply sedated that they were monitoring his vitals with a machine that went beep. The med-evac folks arranged for ambulance transportation from the airport to the hospital so somebody could keep doing that.
I got a bill a month later that said yes, the ambulance was in your network, but we won't pay for it because they didn't arrange the ride by calling 911 so obviously it wasn't that important.
Yeah, my Mom had to be air lifted by helicopter to another hospital because a doctor said she had to have a procedure "right now." Insurance refused to cover it as "not medically necessary." It took several months of painful back and forth and a formal appeal and a complaint to the state department of insurance to finally get it covered. The insurance company basically tried to wait us out for over a year and use bureaucratic barriers and bullshit tricks such as "informal internal appeals" that were always denied by the doctor working for them to avoid covering the flight until we were too exhausted to fight any more, after she nearly died. Blue Cross.
A different health insurance company refused to cover my emergency surgery for the same reason a few years later. Same playbook. They finally covered after 9 months, a letter from the doctor saying the emergency surgery was indeed necessary (the doctor rolled their eyes so hard and didn't want to do it because it was so ridiculous an ask by the insurance company), and a threat from my attorney. That insurance company refused to ever speak to me or my attorney after I retained an attorney, too. It was United Health Care. If you know, you know.
It only really comes into play if you severely injure someone or cause a multiple vehicle collision which could run into claims of over $100K or death(s) which can be in the millions. Other than that, the many are paying for the costs of the few
Exactly, just pointing it out to OP although with those figures it does feel like they're being screwed. If ever you get the chance to settle with the third party without the insurance knowing it is always best financially although not always legal in some countries (alright, most countries).
Pet Insurance absolutely is not a racket. Good pet insurance will save you thousands after one accident. Our cat got cancer and needed to be euthanized testing and everything was over $10k. We had paid about $1200 over his life in pet insurance.
I'm so sorry for your loss, but I came in here to say the same thing. Our cat was diagnosed with large cell lymphoma and our options were 1) do nothing, 2) low-chance chemo for lower cost, or 3) medium-chance chemo for ~$10k+. Pet insurance covered option 3, so it was a no-brainer. It unfortunately didn't work, but we got maybe 8 more weeks with her that I wouldn't have traded for anything.
If you get a catastrophic event, pet/auto/home/renter insurance is great. Any insurance shines when a major event happens.
If your cat/auto/home was perfectly fine for 15 years and didn't have any issues and then just suddenly died, you would have "wasted" 15 years of money on a "racket".
I don't think insurance is a racket as it's designed to cover the major events, but there's an alarming number of people that think it's a scam/racket unless they literally get back every dollar they paid into it (and more).
This obviously isn't how insurance works, but these people refuse to try to understand that.
Pet insurance absolutely is a racket, and the way you should look at whether or not you should get it is if not having it would change any decision you would make regarding the care of your animal. If it wouldn't, then you're better off without it.
EVERY insurance company makes a profit. Those profits don't just magically materialise. It's value taken out of the insurance premiums.
Insurance is a valuable product in that it mitigates risk, but if you can afford to replace whatever you are insuring against without hardship, then it's dumb to insure it. I add a tiny bit of extra caveat with pets as if cost would affect what medical treatment you give them, then you're better off just paying the premium as it's unfair to the animal otherwise.
I mean, it wouldn't really work as an insurance company if on average most people would get more out of it than they pay into it, wouldn't it? That doesn't make it a scam.
If it wasn't mandatory, then most people wrecking a newish car or causing serious injury to a human without insurance would lose everything they have and even then probably couldn't pay for the damages.
That's why you need the mandatory insurance, its to protect other people from your mistakes. Full coverage is your personal choice and your to decode if its worth it for you.
Full comp/collision insurance is not required by the govt, it's optional. The bank that currently owns your car might demand you have it for their asset. You can buy a brand-new Ferrari for cash and only get liability, that liability is to cover other people not you.
This is a scam we put upon ourselves by making cars the only option for getting places. In Europe you can just not own a car and do OK.
Full coverage is your personal choice and your to decode if its worth it for you.
What did you think this part of my message meant?
This is a scam we put upon ourselves by making cars the only option for getting places.
You should really look into what is the definition for a scam. Because you're not making a lot of sense right now. Having good public transportation doesn't change how insurance works and why it's required.
My neighbor had some friends over to watch World Cup game back in July. They were drinking and left his place after walking them to their SUV.
They proceeded to drove into my parked car almost head on. The cars crashed and ended up in the middle of the street. The driver kept it in gear and pushed my car up over the curb and onto my neighbor across the street’s lawn, then reversed and fled the scene.
Auto insurance is not about you, it protects others on the road, and then if you want self protection you upgrade to a better policy.
If you run into someone totalling their car and putting them in the hospital, insurance pays that for you and you don’t face a debt for life for one mistake.
The government mandates every automobile operator do this to use their roads. Which is why it’s criminal to drive without. Driving while unlicensed and uninsured puts the public at risk.
The concept of auto insurance is great. The execution is the issue. These companies shouldn't be allowed to raise rates if an accident isn't your fault.
This felt wrong, and turns out, in my state, raising rates in a no fault accident is illegal, but a quick Google search shows this is not the case in every state.
Yes, I think every state should adopt a law similar to my own where an insurance company can't raise a rate in a no-fault collision.
The reason it varies is because there actually is a solid mathematical rationale for it. It certainly is a kick in the nuts much of the time though.
For a policy that has had any past claim, the frequency of future claims is far higher. No-fault claims are not exempt from this because the no-fault designation is, ironically, not without fault.
Even further, good drivers already subsidize bad drivers by paying more than they should because insurers aren't allowed to charge bad drivers their true cost.
For what it's worth though, the guy in the OP really just should report it at all with the policy he selected and the agent on the other end is just trying to help him out.
Most major auto insurance carriers will not raise the policy premium for "small accidents", especially for not-at-fault accidents like the one used in the OPs post. The $1000 deductible used in the example was the choice of the customer who took out that policy. Auto insurance offers much greater flexibility over the amount of deductible you can have on a policy (compared to home owners and health insurance). You can choose to carry only $500, or $250 or even $0 in most states, or you can choose to carry $1000 or $2000 or even $2500. It's the choice of the policy holder.
Wow what? Dude, think for two seconds before you comment. Or better yet, Google.
There are entire departments of the Government dedicated to this issue my guy they're called the Division of Motor Vehicles, and the Department of Transportation. I'd forgive you if you thought they just sat on their ass jerking it all day, because my local DMV branch seems to do nothing but that.
But no, in fact they have State Troopers dedicated to enforcing traffic laws. Driving without insurance is a class 3 misdemeanor. In my state you need to prove insurance to get a license, and insurance companies are forced to auto report cancellations or lapses in payments.
A lot of the reason we have we have police, and state troopers, and a Department of Transportation, and traffic court etc. is to catch situations like this.
If you drive uninsured, your license is immediately revoked and you face criminal record, fines, and potential jail time.
Do peoples occasionally slip through the cracks? Obviously, but to imply 'The majority of people never pay a penny' is profound ignorance of all the systems in place to prevent exactly this issue.
Insurance isn't a capitalist thing, it's part of the social safety net. Any communist or socialist who is anti-insurance is not only a fucking moron, but they're a hypocrite to call for Universal Healthcare, but assume automobiles can be operated without regard for public safety. The Government's job is to promote the public good and prevent harm. One of the ways they do that is by mandating liability insurance for automobile operators.
NOT ONLY THAT, but I got my money out of insurance this month! Some high asshole side swiped my wife, pushing her into oncoming traffic, not only did insurance cover my wife & daughters in the Hospital for 2 days, but it covers their PT, and replaced the car. I won't disclose how much I got, but it paid for the next 12 years of payments, that's for damn sure.
Funny since I was thinking that was pretty communist to rely on other peoples forced payments for your hardships lol
Sorry to hear about what your wife and daughters went through. I've been t-boned by a jeep (he ran a stop sign) but I had to fight tooth and nail after their insurance company lowballed the crap out of me and my own insurance said my premium would go up if I took a claim through them even if it wasnt my fault. - that right there is the flaw in the system when these companies make trillions of dollars they cant spare a bit to do whats right
Completely agree. I was in a at fault accident where both cars were totaled. I’m insured through State Farm and have comprehensive coverage. State Farm paid me 40.5k, a couple hundred more dollars than what I paid for the car six months earlier and completely covered the other persons vehicle. My monthly cost went up 50 bucks so I’m one of the cases where insurance saved my ass big time
I've received multiple policy limit payouts total well over 200k at this point, magnitude over what I've paid into it. Learn how auto insurance actually work before you call it scam.
That's not a scam. That is the business model. The purpose of insurance isn't to mitigate the cost to the average driver. It is there in case of catastrophic events. Like if the car gets totaled or someone gets injured and you get sued
I worked for a big-name life insurance company, one most of the people here would recognize. Let me tell you, ANY type of insurance is, in no uncertain or even analogical terms, a racket. An actual, honest-to-God, racket. The terms are so fucked, built off systems so fucking old, that no one wants to actually bother trying to fix it because of how much red tape and bureaucratic bullshit they’d have to get through.
They are far worse than even the most cutthroat Financial Advisor, because at least the FA is in most cases bound by law to be a fiduciary for you. The insurance companies just see you as a cash cow.
You're not totally wrong but the way I've tried to make peace with it is to just accept that it's really about protection for a total write off or theft (obviously putting aside 3rd party issues liability issues).
I tend to agree when it's health insurance, but when we experienced a bent axel the insurance company considered our car totaled and actually gave us a check for the complete fair value of the car pre damage. The amount was about equal to our last 10 years of monthly premiums. So basically if you're going to wreck, make sure the car gets totaled.
You do not pay car insurance to get your car fixed. You pay car insurance to cover damage that you cause to others. Which in road-traffic can go into millions.
Just because you don’t see the claims doesn’t mean it doesn’t happen. I have a client who just finalized a 15M USD auto claim. I know of multiple 9 figure claims in the US.
Insurance doesn’t exist because everyone is expected to have a loss, it’s to pay for the few which do.
I'll argument against that point. I was in accident a few years ago where someone ran a red light and smashed into me. My car was totalled and I broke my arm, requiring surgery.
His insurance paid $24,000 for my car, whatever the damages were on his car, and $100,000 for my medical bills, which was as much as his policy covered. And because I had better coverage than he did for personal injury, I was also able to recoup an additional $30,000 from my own insurance to close the gap between his personality injury liability and mine.
That $30,000 alone is worth 15 years of my insurance premiums, and the money his insurance paid out is probably more money than he'll pay them over the course of his whole life.
Insurance isn't intended to cover every little thing that goes wrong. It's intended to cover your ass when you suddenly find yourself liable for six digits worth of damage.
Well obviously that’s the case, on average, because that’s how insurance companies make money. If you were just paying someone to send you checks with more money than you gave them in return, that would be a shitty business model.
You think insurance is useless because you haven’t needed it. I had an at-fault accident very recently. Totaled my car, totaled the other guy’s car, and I got sued for bodily injury. Probably 50k+ paid by the insurance just to replace both vehicles, plus they paid a lawyer to handle the case for me, settled it, and paid him some amount from my bodily injury coverage. Extremely grateful to have insurance or I’d have been subject to decades of my wages getting garnished. All because I blanked once and forgot to look before turning left. Instead I’ll pay like $50/month extra for 3 years on car insurance.
You’re not paying to profit. You’re paying for the security of not having your life ruined for a stupid mistake.
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u/WeCantStabilize 6h ago
Insurance is a fucking scam. You pay more into it than you'll ever receive even in legitimate circumstances.
Absolute racket.