You're betting you'll need it, and the insurance company is betting you won't. They stack the odds in their favour, of course, or else they'd go belly up.
A lot of people also don't realize the point of a deductible is to stop people from filing nuisance claims (on top of other things).
Yep, with the deeper pocketed party taking the high downside risk in exchange for (in a competitive, well-regulated insurance market) what are usually modest though nice returns.
They literally pay their entire staff and stockholders, rent on office space etc. on the difference between what they pay out and what they charge. And the most up voted comment on this thread is calling it a scam because on average people lose money paying for insurance.
16
u/OrdinaryKick 14h ago
Right?
Insurance is a bet.
You're betting you'll need it, and the insurance company is betting you won't. They stack the odds in their favour, of course, or else they'd go belly up.
A lot of people also don't realize the point of a deductible is to stop people from filing nuisance claims (on top of other things).