ELI5: How do insurance companies actually make money when…
0 reactions
ELI5: How do insurance companies actually make money when they sometimes pay out way more in claims than people ever paid in premiums?
after hurricane helene, state farm paid out billions in claims way more than what florida customers collectively paid in premiums that year. but how does that not just wipe them out completely? the math doesnt add up on the surface. is it because the losses get spread across every customer in every state, or is there something else going on behind the scenes that i'm totally missing. anyway been down a rabbit hole on my phone for the past hour and cant find a straight answer so figured id just ask here
#education
source
after hurricane helene, state farm paid out billions in claims way more than what florida customers collectively paid in premiums that year. but how does that not just wipe them out completely? the math doesnt add up on the surface. is it because the losses get spread across every customer in every state, or is there something else going on behind the scenes that i'm totally missing. anyway been down a rabbit hole on my phone for the past hour and cant find a straight answer so figured id just ask here
#education
source
| 4,000 mlx | |
| 5 | |
| 0 |