Quote:
Originally Posted by NIKKG
Also, my deductible is still $50 bucks, I've only used insurance once when my TP broke and had it replaced for the same one a few months ago. The deductible didn't rise because people were doing fraud, they went up because they wanted higher profits. All these companies work together to defraud people.
|
In reality, we pay insurance to help other insured if they experience a loss. In the best possible situation, the fee we pay each month would cover the loss of of some insured and a little leftover for the insurer for administration/cost to run their business.
For an example, we all pay $7 a month for insurance. If there is only 100 people in that pool, that is $700 in fees collected per month. In that month, insured #66 experienced a loss with their TP. They paid the deductible of $100 and got a brand new TP which has the cost of $580. Assuming that no other loss are report that month, the revenue collected by the insurance company is $800, purchasing cost is $580 and total profit before other admin/payroll/etc is $220. Not all months will be like this as for it varies ever so often. One month, they could experience 10 claims or none at all. This is a just a small example but you expand this to thousand and million to see a different result.
Basically, insurance is just a tool for us to use in order to cover our butt. Yes, I understand you can buy TP out there for $200 or so and not the $580 price tag, but have you consider without insurance, the price would be a lot higher; as for the cheapest way to get TP at subsidize price is through new customer pricing. Insurance claims (legit or not) bring a whole new pool of supplies of TP and any other items to the market. As for deductible increase, they only raise it due to fraudulent claims. Just too many people are abusing the insurance company for claims when it was $50, so raising it to $100 will make those abusers to reconsider their options. If really understand how insurance works, you would really appreciate it. My 2 cents..
