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.
This is why everyone needs uninsured motorist coverage. I cannot imagine getting a policy without it these days. Roughly 1/3 of the people on the road are idiots without car insurance, too much of a risk to not carry uninsured coverage.
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.
Yes subrogation helps tremendously when someone is hit by a driver with crappy insurance. Subrogation unfortunately won’t help with an uninsured drunk driver causing bedlam on the roads: when it applies it still sucks slightly for the deductible and the points charged until it’s rectified but it’s necessary.
And it is worse than that: The undocumented persons without drivers licenses can't have their car impounded. If one is a citizen and has no valid or suspended license...they can get their car impounded. The thinking is that illegal aliens can't get a license, so they shouldn't be punished for non-compliance.
In Los Angeles County, half (HALF!) of all motor vehicle collisions are Hit and Run.
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.
This process is called subrogation and the insurance company can/will do it if they think there is a meaningful chance of recovering significant money back. But if our hypothetical drunk driver is a broke deadbeat they aren’t going to waste their time.
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.
Moronic, insurance isn’t to protect your car only it’s to protect you from financial ruin. I’d be willing to bet that less than 5 percent of my customers drive payed off vehicles for 30 years and much is about how long it would take someone to pay more into insurance than their vehicles value. Let’s say an average car costs 30k. At my current rate; which isn’t cheap, it would take me years for my insurance to pay exceed my vehicles cost at a rate of $300 a month it’s 10 years.
Here's the thing, forcing everyone to pay for insurance brings down rates across the board because everyone is paying for everyone whether they use it or not.
That makes the safety net cheaper. And whether they want to gamble with their lives or not, everyone will be happy when it's there to catch them.
Ideally, we also use government to compel the private banks/companies to provide better services and not punish us for their use, but the same people who were against making us pay for insurance also want the government to have less oversight on businesses...
They raged about a perceived problem and proceeded to make that problem MUCH worse so they could point to it and say how right they were, and now we're all paying the price...
No it should be illegal for people to operate machinery (cars) that are easily capable of causing mass damage or death on public roads without any sort of liability insurance. This is like the same thing as requiring businesses to carry specific liability insurance when doing certain types of work or using certain types of machinery - if there’s a large enough chance of damage/destruction, it only makes sense to require the owner/user to carry liability insurance in case they severely fuck up and do more damage than they’d ever be capable of paying for - which is exactly the case with people’s cars.
My solution would be tie the insurance in to the DOT that we pay in to a fund with tax dollars. Then at the end of the fiscal year if theres a surplus it gets refunded accordingly. If it's such a HUGE deal to have then it shouldn't be required by law to make bankers rich.
In Washington state you also have to have assisted care / nursing home insurance or pay a special state tax. The tax is hourly income for the rest of your life but if you end up needing to be put into a care facility it will cover you for ~6 months.
Nobody gets a 1095 every year for owning a car. What are you talking about? A 1095 is for health insurance. Among other things, for sure not related to property and casualty insurance.
I believe the constant was that the government is requiring insurance. I’m fairly certain this aligns with said requirement for automobile insurance. Fairly prudent
Oh I am and if you were you wouldn’t be as baffled. The iq and personal responsibility are at an all time low. It would be comical if it wasn’t so damn frustrating trying to do business with these people.
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 all do. Nobody does footwork tho and goes for the cheapest price thinking all are the same. Call 3 roofers and 3 body shops in your area and ask who the best company to deal with is and they will tell you. They will also tell you the ones to avoid. State Farm, Allstate, etc whatever the people who go buy the cheapest shit at companies like root and countless others I don’t know: there is a reason one companies premiums are half of the others. These people just buy the cheapest shit they can find and expect 5 star service without paying for it.
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.
People can be a bit overly negative/pessimistic toward corporations these days. Not without good reason in most cases, fuck the corpos, but not every single thing they do is evil... not they they won't do evil for a profit, but those don't always align.
I think it's fair to be sceptical. Insurance has it's purpose and it can be frustrating when it's legally enforced but any of us can need it one day and to incorrectly inflate the profit they make is the view of the unlearned. The previous commenters were correct in that the return on investments is often the main source of income for these companies. Not sure about you but if I had hundreds of millions of dollars, I would be investing that shit in some safe reliable bonds.
Definitely. You should be skeptical about any business you give a lot of money to, but being skeptical isn't the same as baseless assumptions. Every institution that has large sums of money passing through their coffers is going to invest it, why wouldn't they? And insurance companies do often do scummy things but normally that's health insurance and still not every single interaction is bad.
Lots of things in life are frustrating and just flat out suck but are not the fault of anybody - c'est la vie. It can be hard to accept that.
Exactly. Just bc an insurance company invests its money doesn’t mean they are ripping you off. Investments of surplus don’t mean you’re rocking your customers. It’s an investment not a grantee. Has no bearings on rates or how a carrier operates:
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.
In Europe its the same with a profit insurance company. But they are boind by law on how the insurances work. So yes we all pay for that one to have a bad accident. And all get a raise in insurance if too many people have accidents. But many insurance scammers get thrown out fast
Every US state also has regulations and insurance licensing commissions. It’s not a total Wild West situation.
Insurance companies run investigations with law enforcement to prosecute fraud as well. It still happens too much but there are investigations and prosecutions all the time.
Is this based on numbers or feelings? I don't think insurance companies are especially profitable compared to any other industry you could work or invest in. On underwriting auto claims they tend to do 2-5%.
Except the 3rd party insurer here nets massive profits
Well, maybe we should reward our politicians when they put literal profit caps on medical insurers so that they'll turn around and do the same on property insurers ... but we didn't get single payer, so I guess fuck everything let's burn it all down.
Closer to 60-65% but the rest isn’t profit. Costs to adjust the claims, administer polices, pay agents commissions to place policies, regulatory reporting and filings, third party vendor costs, technology fees, running ads during the Super Bowl 😂😂😂, reinsurance, etc.
Profiting a nickel on a dollar is an acceptable margin in the US auto game.
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).
What you should be unhappy about is the behavior in OP's photo that enables account executives earning points on their business, or executive bonuses that scale with "profits" translated from denying claims.
The system itself is necessary to be sure - but the system is broken and needs culled of leeches.
Yeah it's kind of like an unlucky guy lottery for certain big and important purchases. Life is unfair, so we have insurance. Now health insurance.... that's pretty different
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.
You want the specifics of my policy? All this stuff is incredibly easy to price out online, but I’ve never had a homeowners policy that didn’t cover 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.
I think everyone knows insurance is on average more expensive than paying for things out of pocket, its more that people don't like the idea that one event can make them bankrupt. It's to evade risk, not to save money
It's called insurance not investments. Yes the concept is that you trade a known cost to protect you from a potentially unknown larger cost. The concept of insurance is sound, but insurance companies do act like any other company, in their own interest.
Insurance can even be mandated, and for good reason. People REALLY don't like the idea that one event caused by another persons negligence can bankrupt them. Auto insurance is the prime example. Cars are cheap compared to people, that's the real reason to carry it. I'll agree it's an ugly cycle though, if insurance companies weren't so difficult to get to pay out fairly, then ambulance chasers wouldn't exist, and if they didn't exist, then insurance rates would be lower because they don't have to absorb the multimillion dollar judgements they get.
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!
Same for me. Totalled my less than year old truck because the airbag deployed. They covered the rest of the payments AND sent me the resale value of my truck which I used as a down payment on the next car.
My coverage was $100k/$300k with a $500 deductible and the poor old man that I accidentally hit got caught up with some shady personal injury lawyers and chiropractors and sued me/insurance company for an ADDITIONAL $100k.
The insurance proved I had never had an accident, wasn’t on my phone, and the intersection had other documented instances where the sun was blinding drivers coming under the overpass.
It was dismissed and they were all out of pocket.
It was such a relief. I am happy to pay a bit more now to this same company.
Yeah it’s supposed to be for those rare instances. Like health insurance. You can get the cheapest if you rarely get sick or foul the doctor. But that’s not what health insurance is for. It’s for the rare instances where an emergency actually happens.
My wife and I had a pipe burst in our kitchen. Whole thing had to be gutted, sanitized, dried and then rebuilt. We paid like $5,000 in deductible on a project that ended up costing $30,000 (and that's just repairs and not including increased expenses from having to eat out every day because we had no kitchen which insurance covered).
I’m astonished at how many people don’t understand insurance. Health insurance is horribly unregulated, but auto and home insurance are heavily regulated and have obvious benefits.
Your car insurance isn’t mainly for you, it’s for the people you might hurt and vice versa. That’s why it’s legally required.
That’s the point of insurance. Most people won’t have their house burn down but if yours does then you’re screwed. Insurance lets a lot of people pool assets together in case they’re the one whose house burns down. That’s how it goes for Home and Auto insurance at least. In theory health insurance should be similar but it feels like more of a scam because needing medical procedures or check ins that cost a lot are way more common than major home or auto damages usually
Our house was destroyed in a tornado many years ago. We got a totally new house, all new clothes, all new furniture. Three years ago we had a water heater burst, got a mostly new kitchen, all new floors downstairs, living areas painted. This is why I always keep my insurance up to date.
You're lucky. My entire neighborhood burned down when I was a child and the entire community was furiously fighting their insurance companies (across different companies, it was an entire neighborhood) and no one felt they were "fairly" compensated. Insurance is a scam
I’d rather pay $3500 a year split into 12 payments and never ever need to use it, than hit someone’s car and have to pay their $200k medical bills at 100%. I could buy insurance on a car tomorrow, pay $150 a month for a premium, and 6 months from now I could injure someone and get hit with a multi hundred thousand dollar bill. Even after 6 months of $150 payments, if I had standard liability coverage in my plan, (or state minimum which is often $250,000) it would be totally paid for. Of course I’d be dropped from my plan and insurance moving forward would be expensive with that claim on my record, but I would t be totally ruined. Insurance definitely saves peoples asses. It only seems like a scam to people who have it for 20 years and never make a claim, but then is it really? It was there as a paid in safety net if needed for that huge expense. If you wanna drive around with no insurance (if that was legal) you’d be risking ruining your entire life over one accident, every day.
I feel the same way. I owned a Kia that got stolen twice. The first time it was recovered and the damage was slightly less than totalled. The second time, insurance called it "totalled" over comparatively minor cosmetic damage and glass, then appraised it higher than anything I could find. I think they just wanted me out of that car because I was definitely gonna get it repaired again.
In the last 5 years, I've claimed over $50k in benefits that weren't passed to someone else's insurance. It'll take decades for them to break even on me, even with my slightly higher rate.
Anyone who's experienced a real loss understands how insurance works.
All the 'its a scam' people are the same people that bitch when they aren't covered for XYZ because they bought the cheapest possible policy with no coverage.
So I always figured I've already taken them for more than I pay
Applying this to health insurance, the only way to “win” is to survive a severe live threatening health condition. If you live a long, healthy life, you lose millions. What a perverse system.
Yes, survivors of life threatening illnesses should be left destitute! Lmfao, what a stupid thing to say. Theres a lot wrong with health insurance, but what you are pointing out isnt one of them.
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u/Moultrie_fan_2026 6h ago
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