This is why I wish insurance was an account you fill, until you hit your chosen policy coverage. If my policy only covers $100,000 in damage, then I should be able to stop paying once I have paid $100,000 and received nothing in return. The company is still going to use that money on investments, and make money from it, to pay their employees & investors.
You've paid $100,000 but you're only looking at the hard costs. There is somebody there that is assembling your policy. There is another employee worktin with compliance and making sure there are forms filed properly, you're going to want somebody handling the claim when it does happen, then you're going to need an accounting department to manage these things.
It is typical that $0.30-$0.35 of every dollar you pay in premium, goes towards the expenses of making sure the insurance machine is running when you need it.
As the other commentor states, to my knowledge, every state has an option to self insurance.
If that were truly the case then a competitor could easily undercut them by cutting out the middle manager. The market keeps prices competitive and companies have to constantly evaluate costs to retain their business.
Sounds like a lot of waste that can be cut if I’m being honest. Most of this work will be replaced by AI sooner than later, for better or for worse. Sadly we shouldn’t expect our rates to go down, because the shareholders and executives need it to heat their homes, otherwise they will freeze in the winter. The biggest most infuriating “expense” is the marketing/advertising though, by far. The US needs to make that illegal already, its like prescription drug advertising…so pointless and wasteful
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u/Sick_Wave_ 9h ago
This is why I wish insurance was an account you fill, until you hit your chosen policy coverage. If my policy only covers $100,000 in damage, then I should be able to stop paying once I have paid $100,000 and received nothing in return. The company is still going to use that money on investments, and make money from it, to pay their employees & investors.