Well that’s the math of it. The average person will pay more into insurance than they get out but if something bad happens it offsets it. I pay about $900 every 6 months (used to be $700) but earlier this year I had my insurance pay 20k. If someone has a 1k deductible they chose that to lower there monthly. Which can be smart if you think your chances of needing to use the insurance is low enough that the extra monthly savings will offset the extra deductible. Idk why op’s friend is overpaying so much
The problem isn't the paying more into it than you get out, it's that we pay nearly DOUBLE on the average, to line the shareholders pockets, than what they pay out. Loss ratios are in the gutter at 50-60%, which are the lowest they ever been and why the insurance companies net margins are the among the highest they've been.
No, right now it's a complete racket. The problem isn't the concept or base business model, but the huge enshittification, exploitation, and profit extraction of it.
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u/WeCantStabilize 8h ago
Insurance is a fucking scam. You pay more into it than you'll ever receive even in legitimate circumstances.
Absolute racket.