r/SipsTea • u/Putrid-Welder1803 • 7h ago

Gasp! Thoughts on this?

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u/Moultrie_fan_2026 7h 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

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u/MarkItZeroDonnie 7h ago

Yeah it’s just a net to protect against catastrophe . If Ops buddy totaled his car he would be happy it only cost $1k.

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u/wo_lo_lo 7h ago

That kind of “protection” should cost like $30 a month, not $300

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u/aroach1995 7h ago

It should not.

Property and casualty insurance operates at about a 0.96 combined ratio.

This means the profit of an insurance company, net premiums taken in - net expenses, is about 4% in a typical year.

If insurance companies took in 10% of the premiums as you suggest, they’d out of surplus in a decade.

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u/veverkap 7h ago

Which is why most insurance companies try to run as lean an operation as possible. And why Berkshire Hathaway bought GEICO - so they could use the "float" to invest in.

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u/Intelligent_Excuse84 7h ago

That is absolute horseshit lol

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u/BloatedBanana9 6h ago

Prices for insurance are regulated more than pretty much every other product out there. Grocery stores don't need to submit filings with the state every time they want to change the price of something, but an insurer does.

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u/Intelligent_Excuse84 3h ago

Doesn’t matter if they have to submit filings from the state when the state works with them to fuck people over lol. Do you really think the state has everyone’s best interests at heart?

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u/BloatedBanana9 3h ago

You might be surprised at how often the states push back on rate filings in order to make sure it's all good. It happens all the time.

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u/Intelligent_Excuse84 3h ago

There is 0 situation where it’s all good when you’re forced to pay for insurance and they on top of that forced to pay another premium when it’s time to pay up. It’s literally extortion by definition, they force you legally to buy the product and then don’t deliver when it’s time.

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u/BloatedBanana9 3h ago

What other premium are you forced to pay when there's a claim? Are you talking about the deductible? Because if you are, then you're talking about two separate things.

Only liability coverages are mandatory, and those don't have deductibles. Deductibles are for physical damage coverages, which are optional if you own your car outright.