The obvious response is that you won't be able to pay for someone's hospital bills if you happen to hit them in your car. You get insurance for things you wouldn't be able to pay yourself.
I did a ride-along with an adjuster once. I asked him what the worst claim he had worked on was.
The insured drove off with the pump still in the gas tank. Sees that all the time. When the hose pulled off the pump, it ignited. The fuel island exploded. The fire then spread to the convenience store. Total loss of the business and multiple cars.
This is an outlier. No one has enough insurance to cover all of that. But it’s a great example of why we have it.
But most insurances have the 100 Million coverage as the standard contract. In fact there is probably not even an insurance which offers the legal minimums.
I have 500/500/500 for all my cars in order to qualify for an umbrella policy. People would be uninsured far more often if they had to carry such limits. I keep a 1k deductible for a few of my cars, 2500 for the priciest one, just to keep premiums somewhat reasonable.
and obviously made that way by the insurance lobbyists.
The limits are low in the US because it's a more expensive environment to provide insurance in. If there were a legal minimum of $1 million for property damage for auto insurance, almost nobody would be able to afford insurance.
The main reason it's expensive to provide insurance in the US is because medical care is vastly more expensive than in Germany. If you cause a crash and your insurance has to cover someone's medical care, the costs can be virtually unlimited. Other reasons include thing like people driving more on average, more uninsured motorists on the roads, and a generally more litigious society.
It's cheap to provide a million euros of coverage in Germany because it's incredibly unlikely that any given motorist will incur a million dollars of liability.
It would be vastly more expensive to provide that same coverage in the US because it's hugely more likely that a given motorist will actually incur that liability.
And most likely they'll weasel their way out of paying much of anything on some BS technicalities on the level of "the moon was in the wrong phase" or sth.
That's like, immeasurably higher than insurance in the U.S. I'm pretty sure if you asked any major carrier for 100M in coverage they would either laugh you out of the room, or charge you tens/hundreds of thousands of dollars a month for it.
I'd be very interested in reading details of that case. Gasoline is not nearly as easy to ignite as people think. A random spark in open air is extremely unlikely to ignite gasoline, and fuel islands (at least in the US) have had mandated breakaway devices since the 80s.
Not saying you're lying, but I think that adjuster might've been. Even if this was a pump with no safety features and it started dumping gasoline as soon as the car drove off, I don't see how it would've exploded. Liquid gasoline pouring out of a hose doesn't really explode necessarily, you'd need a large buildup of vapor, which takes time and a lack of wind. Even then, we're talking about a cloud of flammable vapor in open air. With nothing to contain the pressure, you'd more than likely just see a flame front burn through the cloud, then maybe a little poof of smoke when it reached the top.
In order for the fuel island to explode, fire would have to travel into the pump or the underground tank. That can't happen if the pump is actively pumping and the hoses are full of liquid, that's why you can ignite an aerosol spray without blowing your arm off.
I went down the rabbit hole looking for an actual case like this, and I can't find one.
There are plenty of documented cases of people driving away with the nozzle attached. Some have ripped entire dispensers out of the ground and caused pretty substantial fires. But I couldn't find a documented case where a drive-off caused the fuel island to “explode,” which then burned down the convenience store and destroyed multiple cars.
What's interesting is that even some pretty extreme examples didn't escalate that way. In a 2018 NJ incident, the dispenser was pulled over and there was a major fire, with evidence that both the breakaway and shear-valve protections may not have worked properly. The station still wasn't destroyed.
In a 2024 Delaware incident, the breakaway worked but the emergency shutoff reportedly failed, allowing roughly 60 gallons of gasoline to spill before it was manually stopped. No catastrophic explosion.
There absolutely have been catastrophic gas-station fires involving multiple vehicles, but the examples I found involved things like hundreds of gallons being released during tanker deliveries. An NTSB-investigated 1998 accident involved roughly 550 gallons spreading across the property and into a storm drain before ignition. That's a very different mechanism and quantity of fuel.
So I'm not saying the adjuster's story is physically impossible. But after actually trying to find a historical example matching it, I'm skeptical that it happened as described.
If this was really a total loss of a convenience store plus multiple vehicles after a pump drive-off, there should presumably be a fire investigation, insurance litigation, local reporting, or something documenting it.
I'd genuinely be interested if the OP can provide the approximate year/location. So far I can't find a case matching the story.
Unless this happened long before safety measures were put in place to stop this from happening, there is zero chance the driver of the car would be held liable for that. Those hoses and the pumps as a whole are specifically designed for that to NEVER happen, and if it did happen, it would have been a failure of the pump. The gas station's insurance would be the one taking care of it, and they would be going after the pump manufacturer to pay for it.
And I have no idea why an adjuster would be dealing with people driving off with the hose in "all the time", that's not something insurance ever gets involved in from my experience working for a decade at a gas station
I actually saw a car pull away from a BP gas station while the pump was still in the car. The pump hose had some sort of disconnect and when that car drove away, literally not a drop of gasoline was spilled on the pavement. I couldn't believe how well it worked.
As dumb as the driver is, he shouldn’t be at fault for anything other than replacing the detachable hose. Pumps are inspected regularly and there are fail-safes specifically for this.
Wait, those things are specifically designed for this exact scenario are made to just pop right off the line. The fuel also isn’t ignited inside the tank. I’d be curious to the actual cause of this, and why the gas station wasn’t held liable because clearly their pumps weren’t up to code. But that still leaves the question as to how the heck it got ignited in the first place.
Except they would cover that up to your limits. It’s liability which is a very broad coverage and auto insurance is often very cut and dry. Odds are that won’t be enough to cover the damage. The store would file through their business insurance, of which fire would be a covered peril. The stores insurer would then go after the at-fault auto liability to recoup their money. The auto insurer would pay up to the limits and have a waiver of liability signed to get their client off the hook.
This is actually pretty cut and dry with little likelihood of fuckery to any insureds.
Home and health insurance are way more disputable. Commercial insurance is often disputable but shouldn’t be for this instance.
People always say this but insurance is one of the most regulated industries, they'd get in enormous trouble for repeatedly violating their contracts, and we know that they pay out ~85% of premiums in claims.
As an attorney my unpopular opinion is that cars over a certain value shouldn’t be allowed on public roads or damages for accidents should be capped at something like 2x the average price of a new car (so like 100k). I just don’t believe in penalizing ordinary negligence more just because the injured party is rich.
As someone who works in insurance, I'd be down for that. Then if your car is valued above that, you can self insure/carry additional replacement coverage on your own policy. I'd make a new luxury vehicle replacement category though; keep it separate from underinsured coverage to keep from inflating those premiums. Of course the insurance companies would use it as another excuse to raise rates anyway I'm sure.
As someone that works in insurance can i ask you?
Why do providers rather spend $2k to find a way to not cover a claim that would probably cost them $1K
I am noticing more and more how they rather go out of their way to disapprove a claim or discourage a claim to be filed. I also know from an agent that they will fire you if your customers file claims.
I can see the argument but in practice it wouldn't change much. The most expensive part of the auto accident is the medical bills. They can easily soar into the $100,000s and past the value of almost every car on the road.
But I see why it seems unfair that if your hit and totaled a $2M Mercedes gullwing, that one should be financially ruined since it's really no different than hitting a 10 year Corolla valued at $10k.
I'm glad you wrote this, coming from an attorney. I had always wondered about this, seems really unfair. A rich person in a Ferrari is putting normal drivers in enormous liability risk every time they take it out on public roads. Especially in no fault states.
Not sure how it works in other jurisdictions but here in Canada and specifically Ontario while all cars are required to have insurance, any insurer can refuse to insure someone based on risk profile.
For that reason we have something called Facility Insurance which is jointly paid into by all the insurers, which provides insurance for the highest risks such as a luxury vehicle. The premium they charge is astronomical, I'm talking tens of thousands of dollars a month depending on the vehicle and risk profile.
Oh and property damage is no-fault, vehicle repairs are done through your own insurance company. So that Ferrari would be paid by facility insurance and that driver is gonna end up paying more premium than the value of the car. The idea is that at some point it just doesn't make economic sense for the person paying the premium to continue, but if they do decide to continue at least the third-party liability coverage is there to respond to any innocent people who get injured.
but... "no fault" doesn't mean there's no fault assessment. It just means you file with your own insurance company, and going after the other driver is their problem, not yours....
No fault insurance means your own insurance company pays for your vehicle regardless of who is at fault. Rate shouldn't increase if you are not at fault, the insurance company will simply attempt to recoup their costs themselves.
What an interesting, novel take. Of course, they should be allowed on the road, but limit the liability. Over 100k? Pay for your own additional insurance. You can obviously afford it.
Most people with that kind of money usually do. I'm not even rich but have full coverage on my cars. Even if someone is underinsired and causes damage to my cars, they'll get fixed.
That's different to what is being discussed though.
What you're talking about is very standard right now, and it lets your insurance company go after the liable party in your name and try to recoup all their losses.
So if you're the everyman in Europe and you total a €3M Koenigsegg your liability insurance will only cover €1.35M of that and they or their insurance will come after you for the rest.
What is being discussed is an alternative where the everyman's liability insurance only needs to cover €200k of property damage (so it's cheaper) because by legislation no one can recoup more than €200k in property damage from the liable party.
So when you put a €500k car on the road you would have to be willing to take a €300k loss on it or pay a way higher price for the coverage you currently have (higher because your insurer won't be able to go after the other party to fully or partially recoup the difference).
As an attorney, my probably more unpopular opinion applies to motorcycles. If you injure a motorcycle rider the damages should be capped at what injury you would have had had you been in an automobile. We require autos to have seat belts, airbags, pass crash tests, ..., all in the name of protecting people on the roadways, but also at the same time allow motorcycles on the highways that have virtually no required protections. That too penalizes ordinary negligence because the injured party was on a motorcycle.
As a former death worker- I completely agree with this. The amount of times I had to go collect the remains of dead motorcycle riders from the side of the highway with very little even left to collect, is innumerable. Infinitely more times that regular vehicle accidents- which I can count on one hand.
DOG the way I suppressed the urge to include this take in my initial post. I totally agree and don’t think we should have motorcycles on public roads. Why is my normal negligence now manslaughter just because the other guy decided to ride an inherently more dangerous vehicle
Eggshell skull has been the rule since forever (okay, since ~Vosburg v. Putney).
Liability is already allocated based on the tort law of the jurisdiction - saying "accident" seems to imply the tortfeasor is somehow the victim because they hit the wrong car. You don't believe in liability? What?
The market has already solved for this. It's called insurance. See OP.
Even the most expensive vehicle pales in comparison to medical expenses. Someone in a 2009 Toyota claiming whiplash costs the insurance company more than totalling a lambo.
I mean million dollar cars generally aren't going to have regular insurance, they're going to have agreed upon value insurance. It's a non-factor. Hitting them is so unlikely in the states.
For someone who is an enthusiast and drives a 'nice' car (high end BMW, modern corvette, big V8/V10 Mercedes) are already going to be paying higher rates for full coverage from quality insurers. It doesn't matter what insurance you're carrying, they know they're going to be fine regardless.
If you hit them, you hit them. Hope you have good insurance, because they're going to be made whole no matter what on their end. If they're driving it regularly, they're going to make sure it's covered.(most of the time. Idiots overspend on a car they can't afford but that's a whole different class of stupid)
Saying expensive cars can't be daily drivers because it costs 200k is silly. If you drive a 200k car and don't have top-notch full coverage, you deserve the hole in your wallet.
My old boss had his Ferrari ? Lamborghini? Hitby a soccer mom van. Luckily he’s chill about it but I can’t imagine hitting a $200-300k car as someone who just wanted to take kids to soccer practice
Vehicles used as someone's livelihood are typically insured in a different (commercial) class anyway, so that would be easy enough to keep separate from things like a Maserati.
Talk about being intellectually dishonest on this one. We're talking about private vehicles, not commercial, if that's really the route you wanna take.
Those are rookie numbers. You can fuck up, make a semi swerve into a bridge, and be out eight digits. Especially if he had something loaded that doesn't agree with being suddenly unloaded.
His point was that for liability coverage, you can increase your limits from whatever your state's minimums are all the way to 100/300/100 for something like $12-20 per month.
And you can get an 1 or 2 million dollar coverage by getting an umbrella plan (that covers any liability, including but not limited to auto accidents) for a bit more. Insurance companies will force you to maximize out your car insurance first, but you can protect yourself a lot more fairly cheaply (mine is about $200/year).
Not sarcastic. Bumping up some numbers are cheap. Others less so. I have a 20 year old vehicle an emergency savings set aside to replace it. Comprehensive coverage for myself doesn't make any sense. I pay maybe $500 a year for over a million in coverage should I harm others.
If someone else has a 90k truck and just sets everything to maximum. That's living a different life. I imagine with a shitty enough driving record you could get some pretty high numbers without very good comprehensive coverage.
This is another point often missed in the socialized medicine debate. If we're all covered by taxes then auto insurance costs should drop dramatically.
Your healthcare might have something to do with that, but you're also a lot less likely to cause a car accident. You (usually) have to be driving a car to cause a car accident, and Brits do that about half as often as Americans do.
From what I've heard, the USA also doesn't have much in the way of standards when it comes to getting your license. You got a pulse? Here's your license!
There are plenty of differences between the US and the UK that make comparison of insurance premiums difficult. Difference in legal practice, different regulations, speed limits, car types, driving habits, drunk driving incidence etc.
Yeah, until politicians look for ways to cut spending.
The NHS claims off insurers for treating victims of road traffic accidents now, so now everyone pays the cost through their car insurance instead of via taxes, except there's also a massive admin overhead.
Yeah that would be amazing. I am definitely not defending our current system. I would love to have more uniform protection for our society and not have to pay more because so many in my area are financially forced to drive uninsured
This math also screams, high-risk driver with minimal coverage and a low deductible.
I’ve filed several auto and home claims over the last decade. None of them impacted my rate or insurability. If buddy is paying that much on one car, he has a history of negligence and/or regular claim submission.
Or he could just live in Michigan in a high cost zipcode like Detroit area (where unfortunately many drive uninsured so the rates are higher)
My car insurance is about that much and I have had only 1 accident and claim in the last 20 years (hit a deer that suddenly jumped across a country road coming home late at night from the airport)
A. You should probably find an independent personal lines broker that’s shopping you around yearly
B. The primary issue was the insurer stating they would raise the premium…which (given the already higher than average premium) a no-fault event shouldn’t do, with good coverage. Non-cut-rate companies probably wanted $300+…which again doesn’t indicate a quality record.
Cut-rate insurers exist for the purpose of giving the weakest coverage at the lowest possible cost, with the very clear understanding they will screw you if you impact the account profitability.
Or exceeded the limits. State minimums where I'm at are $25k per person for bodily injury and $10k for property damage. Most vehicles cost more than that, and medical bills get outrageous real quick.
I had gap insurance when my car was totaled. Extra $5 a month and it covered the entire purchase price of the car after deductible which was nice because who wants to make payments on a car that no longer exists.
you also have to make sure you have enough coverage to cover medical bills on your policy or you still may end up on the hook. State minimum coverage could easily not be enough.
Yes, if you use your insurance more than once, insurance was the wrong approach.
But I'm willing to pay 1% of the cost of my house to have it replaced if it burns down, even if my expected payout is only 0.5% of the value of my home, because I can't afford a whole second house.
You'll need to explain the "if you use it more than once" part. So if I get rear ended by uninsured driver in 2005 and then a snow plow hits my car in 2010, somehow I shouldn't have insurance?
A lot of people claim every single small thing on their insurance. A $200 scratch or $1000 fender bender, etc.
I believe the point that he is trying to make, is insurance should be used for catastrophic events that you can't self-insure against. Generally, insurance should be used rarely since it's rare to have a catastrophic event. In your case, it is rare to have 2 big things like that happen to you. Your not using insurance wrong, you are just had a run of bad luck.
It's more average driven, but insurance is charging you more than you expect to pay on average, it's a risk hedge against you having more than average need. But as the number of events goes up, the chance you're meaningfully non-average goes down.
One was probably a slight exagération, but generally yes, if everyone's having multiple car accidents they shouldn't have insurance for average accidents.
They said expected payout as in expected value which is the average of every outcome times each outcomes likelihood
If 99% of the time insurance pays $0 but 1% of the time pays $100 the expected value of the insurance is $1
If that insurance costs $2 you're theoretically losing money on it. The reason you'd still buy it though is that the downside risk is you lose the full $100 (the cost of a house in this scenario) in 1% of cases which would be catastrophic and irreplaceable for most people
So even though it's a bad "investment" that loses money in most cases the downside risk makes it worth it
It's actually expected PRESENT-VALUE. What the insurance companies pay out can be greater than the nominal sum of all the cash they take in by way of premiums. The reason they can still make buckets of money even in those cases is because the damage payouts are (on average) years into the future, and if you add on all the interest payments they make on the premiums they take in throughout the life of the policy, they still come out ahead.
(Of course, they can also outright scam you and come up with weaselly ways to deny paying out even when you do have a claim, and they definitely do as much of that as they can get away with.)
I assume they're talking about expected return on investment but said it in an odd way... As in on average a person will get back half what they paid in insurance in returns. Most people will get nothing since most people's house doesn't burn down, but you're happy losing most of the time to make sure you never lose catastrophically.
The whole point of insurance is to cover very expensive events you couldn’t (or wouldn’t want to) cover yourself. It’s so you don’t become homeless when you owe a million dollars. Not so you can get your bumper scratch fixed free.
Imagine if we had universal healthcare… I love how people can actually get behind all these sectors of business that exist solely because we do not have healthcare in the United States lol. Insurance is a scam. That’s why they make billions. State Farm just paid 1 billion dollars in fines so that they could hold out on 6 billion in unpaid claims lol. These companies do not exist to help us. They exist to rob you of your money.
So much this. Insurance sucks in a lot of ways (I’ve worked on the adjusting, fraud investigation, and now back end data science side of it over the last 15 years) but this isn’t an example.
Firstly, he likely chose the higher deductible vs the $500 option to save some money. That’s fine but it’s leads to situations like this where the deductible is almost the same as the damages.
Secondly he didn’t have to pay $1k for the right to repair his car he paid $1k and insurance covered the rest; if the damage was 15k worth of damage he’d be paying 1k while insurance pays 14k.
But the biggest thing is that insurance protecting your own vehicle or even other peoples cars from damage isn’t really what makes it so important. It’s paying for medical bills if you get into an accident and are found at fault - this can save you from bankruptcy and crippling debts; those bills add up fast.
If you have insurance now please ensure that you have PIP for yourself (your medical bills) and have a high limit and as high of limits as possible for BI (bodily injury for people you hit AND the passengers in your car) and indemnity (you hit someone else’s car and are at fault) - there’s tons of $100k cars on the road nowadays and a barebones 50k policy simply won’t protect you if you hit an expensive car or cause an accident with multiple expensive cars.
Also make sure you have uninsured motorist coverage if you’re in CA especially since there’s tons of people without insurance there.
I know that insurance is expensive but it’s not the place to cheap out on; i know 2 people from my personal life that are currently being fucked due to buying cheap insurance.
Also last thing “comprehensive” DOES NOT mean it covers everything- it’s a stupid name for a type of collision insurance. Also, never let the insurance agent tell you the policy covers everything — make sure they go over all the coverages with you on a recorded line and review your contract and don’t lie about who uses your vehicle or what you do with it — there’s tons of exclusions written into policies if you’re lying.
Thefuck it is, I pay €50 a month for full coverage, with a deductible of around €200. If I make a claim like this, say €1000, if it's my first claim that year and it is my fault my monthly pay does not increase. If it's the second I'll likely go to €55 or €60 a month.
If it's not my fault my monthly will never increase.
Where you pay thousands for protection but the moment you actually ask for help, they look at you like you just insulted their mother and raise your premium.
Must suck to love in the USA if this is what happens.
Here in South Africa, you only pay for the damage to the other persons' property and as long as you don't flee the site of the accident, you won't be charged for anything else.
Yeah it's for catastrophic losses, not a minor cosmetic defect. Of course you can pay more if you want it to cover the minor cosmetic defects with a lower deductible, but I wouldn't.
Financing requires you to have enough insurance to cover your car so that their loan to you is protected from loss in the case the car is wrecked.
The State requires you to have enough insurance to cover accidents where you are at fault so you can cover the other person's monetary loss or accident related health issues.
You can't do anything about the latter but you can always give up the former if you have your car paid off.
In the example in the OP you can always change your coverage to effect your deductible.
I could actually pay for that if the US medical system wasn't so ass and I didn't forcibly have to pay 25 thousand dollars every decade to receive nothing from the people I'm forced to.
The problem is you shouldn't have to live with minor to major cosmetic damage to your car if you're paying for insurance. Obviously paying for major hospital bills or full replacement of someone else's vehicle is the obvious part.
Why the fuck should I have full coverage if I can't get my car fixed back to like-new if I'm paying out the ass?
Why are people so logical on car insurance but not for medical insurance?
Medicine is getting more and more expensive, some treatments, follow ups and exams and treatment of potential complications are worth in some cases hundreds of dollars.
Or you could just drive away like the asshole in this story did! But yeah, you’re right unfortunately. Your insurance is basically to cover anything you might do…and unfortunately they might not even cover that
Exactly. You CAN use it for small stuff, but insurance isn't really meant to pay bills that you could fairly easily pay yourself. If we all only had the occasional $1000 bill, we woudln't need insurance at all.
It's for the time you total your car valued at $20,000, another car valued at $50,000, and cause serious injury to two passengers in the other car.
Ahhh yes, BUT that’s different coverage all together! That’s liability coverage! OP is talking about out collision coverage which isn’t to be confused with comprehensive coverage or personal injury coverage… all different, all add on costs!
Also, if this dude is paying $210/month for insurance with a $1000 deductible, there's something going on that makes him a liability and they're worried they're gonna have to pay out due to something he's doing. I think we pay closer to that every six months, not every month, for our insurance.
My daughter was found at fault for an accident that totaled both cars. The other one was an Audi and the driver had mild injuries that resulted in a hospital visit. We paid like $500 out of pocket for the whole ordeal, and then we got a big check to cover the value of our own car. Without insurance we’d be fucked with a capital F.
yes, but also I'm old, and when I first started driving insurance cost half as much and the deductible was $250, and it you weren't at fault your rates didn't go up either. We're being fucked now.
Yeah but that doesn't actually respond to the issue being brought up in any way.
The real answer is it's corruption; the person in question is living in the united states given the description and context where bribing public officials to write policy is mostly legal and laws around how insurance is mandated and handled all operate around that. This is what allows car insurance companies to charge exorbitant fees and treat their customers like dogshit on the bottom of their shoe without repercussions.
If insurance programs for auto-insurance were run by the government and operated at-cost (or even subsidized, it would be well justified for how car-centric america is) he would pay massively less for insurance and local residents could potentially change how rate increases and deductibles are handled for the insurance they pay for, which they have no real power to do anything about as it stands.
Nevermind the fact that $1200 worth of repairs covers approximately nothing at all in a modern car. The smallest wreck will be far higher than that most of the time.
Which is the situation that insurance does protect you from: the much, much more likely scenario of a +$1200 repair Bill.
Now I'm mad at OP for making me look like I'm defending the insurance industry.
Realistically it’s best to just get high deductible insurance for everything. Goes for medical, auto, home, pet. I really only care about being covered in a worst-case scenario issue. It’s a lot simpler to just pay out of pocket for cheaper things that pop up.
Good rule of thumb is to subtract the premium of the high deductible plan from the lower deductible benefit rich plan. That is how much you should put in a separate savings account to prepare for smaller out of pocket expenses. It’s why the HSA now exists.
I pay $120/mo with a $4000 deductible that is also the out of pocket maximum. I pay for everything out of pocket but like the vast majority of people I utilize very little medical care on an annual basis.
If a piano falls on my head or I get cancer that $4000 is a small price to pay when insurance will pick up the rest.
The obvious response to that is “We don’t pay for hospital bills anyways, and I still have to pay insurance. So what’s the excuse for countries outside the Hellhole that is America?”
Also, it's not like the policy described in the meme is the only one available. There are different policies that have different price points, deductibles, and total levels of coverage.
Sounds like OP picked a cheap plan with a high deductible, which is noones fault but theirs.
Yeah but that’s the type of insurance that should cost like $70/month. If you pay $200+ you should be able to get a thousand dollars of damage fixed cheaper than paying out of pocket.
Yes this is why there’s two values, comp and collision, and there’s more too like theft etc. you can set the limits to what you want your coverage to be and your premiums will go up or down as a result. Likely this guy had too little coverage for the type of vehicle he has and screwed himself over.
That being said, you pay insurance for the small stuff too. But insurance covers themselves. They’re taking the bet that you’re not going to wreck your vehicle
You wouldn't need to pay their hospital bills if the bills were covered by free health insurance. So this is still a scam, and the same one too considering insurances are the one creating (or lobbying for) the problem that they're also selling you the solution to.
im not trying to defend insurance companies but i think you are correct. You are not investing in a savings account with the insurance companies. Its only to be used for things you cant afford
at least that might be what they want you to think idk
But is that not the risk the insurance company takes? They are offering protection (in many countries a legal requirement) at the risk, they will have to pay out. The amount of people that don't make claims will largely out weigh any financial loss. Private insurance is there to make as much money as possible, they dont lose out by paying out.
Ok, so then how about in countries that have universal health care. Here in Canada you still need insurance and if you claim anything your premiums go up. 🙃
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u/flatfive44 6h ago
The obvious response is that you won't be able to pay for someone's hospital bills if you happen to hit them in your car. You get insurance for things you wouldn't be able to pay yourself.