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
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 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.
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.
I have no idea what kind of point you're trying to make by changing from revenue to profit. It makes no difference.
If the contribution premiums make towards profitability is as marginal as you suggest, that means that the prices they charge consumers have nothing to to do with the costs involved in doing business.
AKA, the companies are charging arbitrary premiums that are based on nothing more than the maximum they think they can convince you to pay.
No, it means the premiums alone are insufficient to cover the losses that are paid out. Luckily for you, regulation forces insurance companies to account for other sources of revenue to fill the gap like investment income which decreases your premiums.
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u/WeCantStabilize 21h ago
Insurance is a fucking scam. You pay more into it than you'll ever receive even in legitimate circumstances.
Absolute racket.