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The payout is the risk you transferred to the insurance company. You’re not “supposed” to get all your premiums back because then why would anyone start an insu

The payout is the risk you transferred to the insurance company. You’re not “supposed” to get all your premiums back because then why would anyone start an insurance company? Its not a bank account, its more like a lottery ticket. The insurer assumes risk of covering an accident in exchange for the guaranteed income of your monthly premiums. In return you exchange a fixed regular payment for protection against an unlikely event. In order for this arrangment to work, the insurer must make a profit. You might understand this but many people today do not, which is why they expect medical insurance to cover 100% probability events like an annual checkup with the primary care physician.

annoyingnoob 6y ago
I'm not asking for my premiums back and don't expect it. Just saying that after 5 years of premiums the insurance company would be break even on that policy. If premiums are high enough its not really insurance. Not that everyone has the same insurance company but generally if everyone has paid premiums that meet the value of the car after 5 years then all of the insurance company risk is with cars less than 5 years old. The insurance company will keep pushing for more intrusion into your life to 'give you the best rate' but really you'll just pay more. Like you said if it wasn't profitable then no one would do it. Making apps and integrating with telematics doesn't come for free and its not coming out of the insurance company bottom line.
- chordalkeyboard 6y ago
  well how much capital are you investing for 5 years at zero percent return? I think if that was required for an insurance company there would be no insurance companies. > Making apps and integrating with telematics doesn't come for free and its not coming out of the insurance company bottom line. yes, it is. their bottom line has to make room for that by increasing prices. in insurance as in anything, you get what you pay for.

annoyingnoob 6y ago

I'm not asking for my premiums back and don't expect it. Just saying that after 5 years of premiums the insurance company would be break even on that policy. If premiums are high enough its not really insurance. Not that everyone has the same insurance company but generally if everyone has paid premiums that meet the value of the car after 5 years then all of the insurance company risk is with cars less than 5 years old. The insurance company will keep pushing for more intrusion into your life to 'give you the best rate' but really you'll just pay more. Like you said if it wasn't profitable then no one would do it. Making apps and integrating with telematics doesn't come for free and its not coming out of the insurance company bottom line.

chordalkeyboard 6y ago
well how much capital are you investing for 5 years at zero percent return? I think if that was required for an insurance company there would be no insurance companies. > Making apps and integrating with telematics doesn't come for free and its not coming out of the insurance company bottom line. yes, it is. their bottom line has to make room for that by increasing prices. in insurance as in anything, you get what you pay for.