> If you're getting ripped off on your premiums and insurance companies
> paying out, where is the money going?
The money goes back to the people that own the insurance company, no great
surprise there, sometimes there are stockholders who actually like to see
return on their investment.
The financial end of things are relatively simple. As the insurance
company, you evaluate the risk and charge premiums to protect the insured
based on those risks. If you owned an insurance company, and sold premiums
to 100 folks living below sea level, their houses all flooded and you paid
on all the houses, you would likely re-evaluate the risk and substantially
raise the premium or probably not go back there trying to sell insurance.
The worst is the auto insurance industry, quite likely the best organized
crime still operating in the US. You are required by law to pay them for
your auto insurance, yet, they are not required to insure you! They can
quite literally name their price and you must pay it if you wish to operate
your vehicle legally.
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