How does insurance in general work?

Question

and what are some of the rules of finanace for insurance??

Answer 1

Insurance is effectively you betting against the insurance company, whether something will go wrong or not.  The conditions are defined in the policy, your bet is your premium, their bet is the policy limit.

Answer 2

Insurance is a way for many people to put small amounts of money into a into a bucket (the insurance company) that will provide money back to those members(policy owners) in need.

Without insurance when someones house burned down they would be financially ruined. Without insurance what would happen if you wrecked your brand new car? It is impossible for people to save enough money to deal with all the potential hazards. Bill Gates has enough money to buy as many homes as he wants, but I can bet ya he has homeowners, life health and car insurance and even other insurance most people never heard of.

Tootsie3 makes no sense, if you think insurance is a rip off why buy it? Insurance is intended to protect you against a loss. I don't know about you but I don't want a loss just so I can feel good about the money I spent on insurance. Gee my house burned down, now I really got my moneys worth out of the insurance. Hey I haver cancer whoopie!

Many insurance companies are run as mutuals, this means any profits are returned to the policy holders.

You may find this interesting.

http://en.wikipedia.org/wiki/Insurance

Answer 3

Everybody gives them over 1 million dollars over a life time, and a few collect back on it.. like, I am 48 years old, since the age of 18, including car, health, and house insurance, and after hundreds of thousands of dollars I have given them, I have had one claim of $2000 for a house fire.. gees.. I am gonna become an insurance rep.. haha Insurance used to be good protection, now it is just a money market, another way to take from the poor while the rich get richer..