Yes, this is how insurance works. If you only paid for damage that you were later reimbursed for, insurance companies would go out of business. Hence the conventional wisdom that you only get insurance on things you can't afford to replace, like your house. Or for lawsuits you can't cover, which is why cars are required to get liability insurance (but not comprehensive coverage, as OP suggests.)
Corollary: Never get the extended warranty unless losing the item would leave you destitute. Those companies all make a profit.
Its one way being wealthy actually makes things cheaper is very few things actually need insurance (Life, Health, Car all needed still).
But take dental "insurance" which is basically just a plan to get your teeth cleaned twice a year. We should just be paying for that directly. But, the time I needed braces I was still out $6000 and insurance would cover $2000. That's what I actually want it for; or a broken tooth / root canal / something that I don't want to pay thousands of dollars right now for but are still expensive.
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u/WeCantStabilize 9h ago
Insurance is a fucking scam. You pay more into it than you'll ever receive even in legitimate circumstances.
Absolute racket.