What is the reason for insurance companies?

Question

Honestly, What is the point to an insurance company? They rape you of your money and god forbit you have that one accident, and go to make a claim, you most likely have to fight with them and if you get your way, more than likely they rape ya even more of your money. You pay alot for this crap, and when you need to use it, you should be able to get the money without putting up a fight or being raped more afterwards. It seems like a joke. Criminal is more like it. Rape us of our money then make us fight to use it. I can have a savings account and put all that money into it and get it without a fight. I hate insurance... and honestly if i ever got into an accident... i wouldn't tell them...Id just get raped of more $ most likely. There should be one rate across the board based on age, experience, vehicle, etc... not this $5000 from progressive then $1000 from geico. That is bull! But this is a screwed up world anyways.

I was just using the $5000 for progressive as an example since on any quote they are always the highest. No tics/accidents here. I just feel its wrong that one can charge so much and the others charge less.

Answer 1

Now that you got that off your chest........

Is there a question in this? Or is the only question "what is the reason for insurance companies?

The reason for them is because people want to buy insurance to protect themselves from catastrophic losses. For example. Say you get appendicitis. Do you want to pay the $10,000 or so that it's going to cost to go have surgery or would you rather have insurance to cover the cost?

I must say though, if you're getting a quote of $5000 from Progressive, you must be a really bad risk. How many tickets and accidents do you have? Premiums are based on a lot of statistical information. One of the factors is what are the chances that this guy is going to get into an accident that costs a lot of money? If you have a lot of tickets and accidents, that makes you a very high risk and you will pay a much higher premium then I will.

Answer 2

As far as I know, there is no requirement for carrying insurance. There is only a requirement for financial security. If you don't like the way the insurance companies work, then post your own money with the State and become a qualified self insured.

The reason for insurance is to share the risk. That means that you won't have to pay 100% of any potential accident, (your fault or someone who hits you) out of your pocket.

So...if you can afford to be a qualified self insured, go for it, and you won't have to worry about the premium amount, or how much money is paid out. All you will have to worry about is whether you have enough money in the bank to pay any claim you are at fault for, or whether or not you can afford to lose your house, your paychecks,etc.

PS, I live in one of the highest rated insurance states. Yet, I still pay it, and am thankful to get it. The insurance company provides me cost of defense if needed, takes care of my screwups, and because other people may not carry insuance in violation of the law, it protects me from them too.
Your call.

Answer 3

Go to Massachusetts. They set their rates for auto insurance. There's no competition.

Because there's a maximum rate for bad drivers, the good drivers also pay much more there for insurance than everywhere else.

Answer 4

Faye is correct, one more thing I would like to add - if you want a government controlled rate for auto insurance, move to Massachusetts. The rate is the same there no matter what company you go to. It isn't cheap either.

Answer 5

The rates ARE based on age, experience, vehicle, etc... It is also based on your risk factor. They count the fact that you have accidents & tickets.

That is why there are different rates for different people.