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Insurers continue scamming businessowners AROUND THE WORLD!
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Ground_Loop:
Keep in mind that the premiums paid to insurance insurance companies don't just sit around waiting for things to happen. They get invested and become the source of capital for many industries including new businesses, roads, bridges, airports, etc.  So, play the game and invest in insurance companies. Its historically proven to be a safe bet.
Alex Eisenhut:
Nominal Animal:

--- Quote from: Ground_Loop on December 19, 2020, 02:29:00 am ---Keep in mind that the premiums paid to insurance insurance companies don't just sit around waiting for things to happen. They get invested and become the source of capital for many industries including new businesses, roads, bridges, airports, etc.  So, play the game and invest in insurance companies. Its historically proven to be a safe bet.

--- End quote ---
Isn't that just another way of saying "don't take an insurance, because the insurance company always wins"?

My point still stands.
T3sl4co1l:
I've said for a very long time (like, that I've understood since late childhood give or take) --
There are three perfect businesses:
Taxation
Gambling
Insurance

And in recent years I've come into some doubt regarding the first one...

(Keep in mind the current former-president of the U.S. has even managed to fail at the second one, somehow.  But I think that can be excused as a special case, and I digress.)

Tim
tom66:

--- Quote from: Nominal Animal on December 19, 2020, 02:20:43 am ---It is actually the literal opposite.

Insurance only makes sense for events that occur fairly frequently across the entire population, making them statistically predictable.
Then, it is not a matter of gambling whether a covered event occurs, but simply balancing the payment pool and coverage.  Individual events occur so often that it no longer is cost effective for the insurance company to fight every claim in court.

This works fine as long as the insurance company behaviour is controlled by simple rules.  For example, denying coverage because the payment pool is depleted, must not be allowed.  If it is allowed, then there is zero business risk for the insurance company.

--- End quote ---

Well, you're seeing it from the view point of the insurer, but it's roughly the same.

As a homeowner, you don't expect your home to burn down, but if it did, it would be financially devastating.   So you pay a small amount of money to what is essentially a fund, and in the vast majority of cases you never see any of that money back, but you accept that.   No one person could ever 'save' for a fire in such a way (you can't put $500 into your bank account annually in case a fire happens because the fund would never get big enough.)

The insurance company knows on average a home goes X years between a devastating fire and so they can charge you $Y for a house with a rebuild cost of $Z.  And sure they profit from that, although most of their profit comes from investing your premiums into index trackers and the like.  The average car insurer in the UK loses money on the premium (they pay out more on average), but claws it back on the investment.

Is insurance a scam?  It depends on how you look at it.  Things like flood insurance, even then, aren't necessarily a scam because reinsurance covers the possibility of insurers having to pay claims for a large area. 

But for predictable, low cost events, it is.  For instance, mobile phone theft.  It sucks,  but most people can afford to replace their phone, but you can pay hundreds a year for an insurer to cover you anyway.  Car warranties.  Even a £1k bill sucks but, most people could probably afford that if they can also afford to drive.  Those types of insurances are 'scams' because the cost of the policy is relatively high and the payout ratio is also quite high - they are just things you should budget for.

And pandemic insurance just can't exist, just as nuclear war insurance can't exist - the payouts required ($25k per business per month for example?) just are not feasible for even the largest reinsurer.
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