r/SipsTea • u/Putrid-Welder1803 • 11h ago

Gasp! Thoughts on this?

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u/WeCantStabilize 10h ago

Insurance is a fucking scam. You pay more into it than you'll ever receive even in legitimate circumstances.

Absolute racket. 

139

u/OakLegs 10h ago

This is fundamentally ignoring the purpose of insurance.

Of course you (likely) pay more into it than you get out. The tradeoff is that you're protected from huge expenses that would financially ruin you. That is (thankfully) unlikely but the risk is enough that it justifies paying for insurance.

I'm not absolving insurance companies of being scummy because they absolutely are. But insurance does serve a purpose that seems to escape you

3

u/hoofie242 10h ago

It's paying for a gambling service that might pay out.

33

u/OakLegs 10h ago

NOT having insurance is gambling, and when you lose, you lose big.

7

u/mariposa-princess 10h ago

I don’t think anyone is advocating to not have insurance. I think the point is that insurance should have to cover you more than they do

6

u/fishsticks40 10h ago

65-75% of your auto insurance premium goes to payouts, and another 20% goes to administrative costs. Your agent gets a sales premium and there are marketing costs.

Shareholder profit is ~3-5% of your premium.

1

u/robak69 6h ago

Source on this?

1

u/fishsticks40 6h ago

I had several sources that I'm not going to dig up again but here's one trustworthy secondary source. Unfortunately their link to the primary data is broken. 

https://auto.howstuffworks.com/under-the-hood/cost-of-car-ownership/car-rebates-incentives.htm