FOr insurance to work, the total you receive from them in claims has to be less than the total paid in in premiums.
Since almost any complete loss of a house will far exceed the amount paid in by the homeowner in their entire lives, it is clear that most everybody else should feel "ripped off" by their insurance. For example, if you are paying 1000 a year (I used to be less than half of that, and I don't think I'm that expensive yet), and you pay for your entire life, that's less than one hundred thousand dollars, and you'll collect a lot more than that if your house burns down.
I think I'm even ahead right now with my car insurance, having totalled a brand new car two years ago and getting the full retail price out of my company. I'm also even with my homeowners, having gotten money to repair hail damage a couple of years ago, it wasn't that much but as I said I haven't paid that much.
But if you think the insurance company is ripping you off, just don't buy insurance, or find another company. It would be EASY to do so, if the states weren't so over-regulating the industry which makes it hard for small companies to break into the business.
My life insurance company is ripping me off. I pay and pay and pay and never get anything from them. :-)
I'm picking up the slack for you. No claims in 25 years (and that one wasn't my fault) but my insurance goes up every year even with the "good driver discount".
That's not 100% true. The actual answer is that the "income" (premiums and investments) of the insurance company has to be greater than the "out flow" (claims payments, operating expenses, etc).
Insurance companies don't get rich off collecting premiums. They get rich off investing premiums and risk aversion.
Alot of people that pay premiums in most cases never file claims for total loses in regards to homes. In Cane country (Like where I live) , it's for damage on structures that can be salvaged like roofs. So if I have a policy for 10 years with zero claims and then my roof gets damaged and is replaced at $8,000 or so, and I have paid $12,000 ( I pay about $1,800 on $250,000 home probably will shoot up over $2000 next year ) in premiums during that time span, is it ethical for them to cut you lose after one fricken claim? Better yet if you have paid for that time span and you have no claims at all, is it? Then when one of the big boy companies leave, the smaller ones raise their premiums accordingly because people have no other place to turn too.
Try telling your mortage company you are not buying insurance.
Ha, ha, ha!
Right, only problem with your answer is we live in a nation of folk who can't add the numbers and want everything to be free.