It's about socializing risks. One person's life can be ruined by unfortunate events, but if i distribute the weight on many shoulders it's easier to bear. So no, it's not a scam.
It's about socializing risks. One person's life can be ruined by unfortunate events, but if i distribute the weight on many shoulders it's easier to bear. So no, it's not a scam.
Yes, any insurance is a scam. Otherwise there would be no insurance as there cannot be an insurance that has your interests in mind and is profitable.
All right, gentleperchildren, let's review. The year is 2024 - that's two-zero-two-four, as in the 21st Century's perfect vision - and I am sorry to say the world has become a pussy-whipped, Brady Bunch version of itself, run by a bunch of still-masked clots ridden infertile senile sissies who want the Last Ukrainian to die so they can get on with the War on China, with some middle-eastern genocide on the side
Insurance is a scam until the moment you actually need it. Then it can suddenly be a life-saver. Buying lottery ticket s is also a huge scam until the moment you get the big win, then it was suddenly a smart investment. That is the thing about probability based industries, you may live your entire life getting nothing of it and feel like is wasted money, or it may one day save your ass.
The fact that insurance premiums rise the very first time you use it after years of not needing to use it makes it a scam.
FOMO: "Fear Of Missing Out", also commonly known as people with a mental issue of managing time and activities, many expecting others to fit into their schedule so they don't miss out on things to come. If FOMO becomes a problem for you, do seek help, it can be a very unhealthy lifestyle..
Not so long ago, lots of insurers ran at a loss, i.e. they paid out more in claims than they took in premiums, they made their money from the value of their investments in the stock markets (as an example, insurance companies made up about a third of investment capital in the London Stock Exchange). Motor insurers, where there is a lot of competition, often had some dreadful loss ratios. The 2008 crash stopped that.
All right, gentleperchildren, let's review. The year is 2024 - that's two-zero-two-four, as in the 21st Century's perfect vision - and I am sorry to say the world has become a pussy-whipped, Brady Bunch version of itself, run by a bunch of still-masked clots ridden infertile senile sissies who want the Last Ukrainian to die so they can get on with the War on China, with some middle-eastern genocide on the side
Insurance companies will often publish their claim ratios, this is premium income less claims paid out, given as a percentage. Some insurance companies are massive, so even a couple of percent profit would run into billions.
Bear in mind they also have the potential for huge losses, so need to have enough assets to make sure they won’t go bust in a bad year.
I would use the word know very loosely. I know so I don’t buy a ticket unless it’s a record breaker. Lol
But yea Allstate had a operating income of 6 billion last year and Amazon 4.5 billion. That’s huge.
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That makes sense. I wonder the particulars though 6 billion in income is some serious size. I wonder what Wells Fargo is.
Milli Vanilli, Bigger than Elvis
Insurance is what saved my family's home.
We had a large fire break out in a part of the house that managed to destroy roughly 40% of the house, and with ashes and such being in the rest of the house, we could not live there for 2-3 months.
We where saved by the insurance company, despite us not having the "correct" form of insurance to cover house fire. They pretty much bailed us out of a huge bill that we couldn't possibly ever afford.
Here in Norway at least, from personal experience, never had a problem with the insurance company ever trying to screw us over.
Originally Posted by Crabby
It's risk mitigation.
A new bike costs $500.
I own a bike, but I worry it might get stolen some day.
I could buy a bike insurance. It means that if my bike is stolen, I get a new bike from the insurance company. Sweet!
The insurance company looks at rates, and find that 10% of all bikes are stolen, annually.
So they charge me $55 a year for a bike insurance. That is their rate where they cover their losses, and still make some money.
I can buy that insurance.
Or I can save up $50 per year towards an "in case my bike is stolen" fund.
Assuming I'm just as often hit by a bike thief as everyone else, it is a better deal for me to save up the money.
Insurance isn't a good deal compared to being self-insured. You always have to pay a markup to the insurance company.
Over a lifetime, maybe my bike gets stolen maybe 5-6 times. If I paid for insurance in that lifetime, I would pay for 7-8 bikes.
Basically - insurance isn't worth it, on average.
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But - a new house costs $500 000.
I own a house, but I worry that my house will burn down.
And with similar calculations, the insurance company charges me $2500 + $500 = $3000 a year for a house insurance.
That $2500 is what they estimate to lose on average, and the $500 is their markup.
I can save up $2500 a year towards an "in case my house burns down" fund rather than buying that. It's a better deal.
But unlike that bike, I can't actually afford to buy a new house in case the old burns down, unless I saved up the vast majority of that house value already.
It's just no way I can causally dish out $500 000 in case of a house fire!
So I pay for that house insurance. It costs me $500 / year in markup, that I otherwise wouldn't have had to pay.
But it removes the risk of me having to live on the street in case of house fire.
That is the value of insurance. Having insurance means I don't have to casually dish out far more money than I have for an unexpected expense in case my house burns down.
Had I casually had $2 billion in the bank, insurance would just be an unnecessary expense though. It would have made more sense for me to just save that insurance money and buy a new house in case the old burns down. Because I wouldn't had any issues with buying a new one if I needed to with that kind of money in the bank.
Last edited by Danner; 2017-11-13 at 01:13 PM.
Non-discipline 2006-2019, not supporting the company any longer. Also: fails.
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