Except that not every claim is made for the complete replacement value of a car. An auto owner can make multiple claims over the life of his car for repairs that may total thousands of dollars yet not merit complete replacement of the car. Plus there are administrative costs that are factored in -- what it costs to manage the policy, fees and whatnot for the investments that hold the policy's funds, even things as small as paper and the postage on the bills they send you. (And regardless of what you might think, that last bit is a fact of economics and independent of whatever business you might discuss -- those kinds of things have to be paid for from somewhere, and it doesn't matter whether you say so explicitly or not, it gets averaged out across all the sources of income the company has. And in the case of insurance companies, that income is going to be premiums and dividends/interest earned on premiums.)
As for regulation, you may not realize it BA, but insurance is very heavily regulated. Incredibly so. I know -- for twenty years I worked for a company that was elbows-deep in the insurance industry without being an insurer itself. Yes, insurance companies get away with a lot -- and yes, it's sometimes too much. *cough*Allstate*cough* But what they do get away with is a bare fraction of what they could without current regulation.
-- Bob
---------
Then the horns kicked in...
...and my shoes began to squeak.
As for regulation, you may not realize it BA, but insurance is very heavily regulated. Incredibly so. I know -- for twenty years I worked for a company that was elbows-deep in the insurance industry without being an insurer itself. Yes, insurance companies get away with a lot -- and yes, it's sometimes too much. *cough*Allstate*cough* But what they do get away with is a bare fraction of what they could without current regulation.
-- Bob
---------
Then the horns kicked in...
...and my shoes began to squeak.