why dont we get a refund from car insurance companys when we dont make a claim?

Question

i pay more for car insurance than i do for house insurance yet my car is worth a fraction of ££££££ to my house ????

Answer 1

well said that person.

i know all the sensible answers but it still doesn't seem fair.

it makes me ill to think of all the money i've paid out for car insurance
10 + years of driving and no claims!
i'm an insurance brokers best dream!!

Answer 2

That is what insurance is for! You have to understand that they are running a business. If you trully beleive that if you ran into someone on your way home from work, totalled 4 cars, and killed 7 people, that you could afford to take care of all that yourself than by all means cancel your policy. They have money to cover you in case of an accident and you don't. That's the bottom line and that is why they make money on their gamble. Most companies will offer you lower rates every few years for a good driving record, but they wouldn't make any money just paying everyone back that didn't get in an accident.

Answer 3

Insurance covers much more than the value of your car, they cover your for liability.
The reason you dont get money back is because the money goes to pay claims. Here is an example.
100 people have insurance and they all pay $1000 each.
Thats $100,000. In one year, one of the people gets into an accident that was their fault and they are sued for $60k. The insurance co will pay that $60k leaving them with $40k to cover commission that they need to pay brokers as well as fixed expenses of running a business.
In reality, insurance companies only make about 5 cents profit for every dollar of premium that they receive. This money is then invested (usually in equities). Thats why if the stock market is doing well, insurance premiums tend to decline.

Answer 4

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RE :Why dont we get a refund from car insurance companys when we dont make a claim?
i pay more for car insurance than i do for house insurance yet my car is worth a fraction of ££££££ to my house ????
1 following 14 answers

Answer 5

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RE Why dont we get a refund from car insurance companys when we dont make a claim?

i pay more for car insurance than i do for house insurance yet my car is worth a fraction of ££££££ to my house ????

Answer 6

Does your car insurance only cover the value of your car? If so, that's a crappy policy. Mine also includes liability coverage (and a bunch of other stuff).

It's all about risk management. It's a statistical fact that there are more claims on automobile policies than claims against homeowners policies.

One way to benefit from the insurance company profits is to buy stock in that insurance company...that way when they make profits, you make profits.

Answer 7

You accrue a no claims bonus instead - this is equivalent to money back.
The reason car insurance is so much more than house insurance is because cars move about and frequently crash into each other. Houses do not.

Answer 8

because otherwise the insurance company would make a loss. They would have to refund money to people who didn't crash and repair cars and pay injury claims to people who did, which would cost more than the policy was worth. Simple business.

Answer 9

One way that you receive a refund of sorts is in reduced premiums and rewards.
If I sell you insurance I can't make make a living if I have to consistantly give your
premium back in more than a percentage.
Your house is stationary is at far less risk than if it where on wheels, moving and at the mercy of others at all times.
Cause, I would like my money back too! Fat Chance.

Answer 10

Well said. This is the business aspect of insurance. You pay insurance as a hedge to getting bancrupt should you ever get into an accident and all the worst happens.