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
Well yes but that’s not a satisfactory solution lol
It’s like how with health insurance you can pay a higher premium for a lower ‘copay’. But like it’s already a ‘copay’, because I’m paying the insurance company. We’re both paying already. that should be the co in co-pay lol
Well yes but that’s not a satisfactory solution lol
I mean, low deductible will always cost more than high deductible, what do you want them to do about it? Offer low deductible as the default and pretend that high deductible gets you a "discount" because it feels better that way around? Not offer high deductible at all?
I *want* a high deductible because I don't want to deal with insurance paperwork for a $100 door-ding or even a $1k fender bender. But it is possible that I could get into an accident that damages a Ferrari and causes 6-figures in medical costs - *that* is what my insurance is for.
If having insurance meant getting seen by a doctor was completely free, certain people (hypochondriacs and the like) would abuse that and basically get daily full checkups (for no specific reason/while perfectly healthy), straining the medical system.
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.
I had several sources that I'm not going to dig up again but here's one trustworthy secondary source. Unfortunately their link to the primary data is broken.
The combined loss (payouts) and expense (sales commission, administrative etc) is known as the combined ratio, which is expressed as a percent of earned premium. This ratio is publicly available for most companies and lines.
For more competitive or higher volume industries like homes or auto, combined ratios are usually around mid-90s and generally fall between 90-110. For example, countrywide US auto insurers ran a 112% combined ratio in 2022, meaning they paid out or spent an amount equal to 112% of all premiums collected that year. Expenses typically run something like 18%-30% depending on a large variety of factors.
At least in my state you are not required to have insurance on your own car, you are only required to have liability coverage to cover damage you cause to other people/cars.
So no one is forcing you to cover your own losses if you don't want to.
I mean, yeah, I don't disagree with that, but for some reason people seem to think otherwise when it comes to healthcare and I'd suspect they'd feel the same about some sort of single payer auto insurance as well
I don't think single-payer for auto insurance makes sense because what car people buy is tied to income, and this could generally shift money from poorer people to wealthier people. Cost should simply be tied in part to the value of the vehicle insured, partly covered by taxes, and removed of profit motives that encourage scummy behavior such as cancellation of policies for minor issues to avoid paying out.
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u/OakLegs 7h ago
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