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Wait to get hit?

I don't think you're doing it right.

Step 1 make sure you have gap insurance.

Step 2 never make more than the minimum car payment.

Step 3 when your ready for a new car, side swipe a car on the left and drive into a brick wall on the right. Make sure there are no cameras.

Step 4 enjoy your new car.

Step 5 commit identity fraud so you can keep a low insurance premium!

Step 6 do none of this because it's all crimes. I really hope you read the instructions to the end before starting.

I don't mind paying for auto insurance, but I also get more out than I pay :(

I probably pay in 5-6k before my car gets totaled and I get a payout higher than that before I start the process again.

Just once I want to be able to keep a car to the point where it's actually paid off .....

There is plenty to criticise about insurance companies, how did they stumble upon the one thing that is fine?

It's not a scam, it's just how companies work. By definition, every insurance will pay out less than they collected in payments. They have to pay their employees, their offices, taxes an yes, also their shareholders. That's why, on average, insuring something is always a loosing bet.

You should only insure yourself against things that are potentially threatening your or your family's existence: Liability, health, home, occupational disability, survivor benefits. For everything else it's almost always better to just put the money into an account to have it at hand in case.

A lot of people can afford an insurance premium, and perhaps a deductible, but won't have enough for a $40,000 liability even if they saved for years.

What is suggested in this post is not much different from the past where poor people simply went on not having coverage and ended up in indentured servitude working off debts with manual labor like picking rocks. It's also just a thread away from Health Sharing Ministries, which is just a catastrophic failure whose nuance cannot be accurately depicted in a short comment.

The idea is that what you pay goes to a fund that is used when the insurer has to pay a client, therefore socialising the costs of fixing whatever the clients insured.

If every client could get their money back, the company would likely have less money available for the payouts (and would risk everyone taking their money out once a big payout is due), and might go bankrupt if too many payouts come up at once.

So instead the idea is that ideally you end up paying less than you'd get if you needed to fix whatever you're insured for... but it's like a bet: you bet that shit'll happen before you've paid more, the insurer bets that it won't.

Of course, though, like in all businesses based on gambling the house always wins.

Even if they weren't scamming you, they've got actuarial tables telling them how much you have to pay to make sure they'll have a certain amount of profit... but of course they are scamming you, and they'll do everything possible to avoid paying you even in the unlikely event that you fall on the wrong side of the actuarial table.

I think where I live you can drive without insurance if you have $1m cash available earmarked for anything that happens.

This might be an urban myth though because I don’t know anyone that does that and haven’t actually looked it up.

How about the fact that home insurance doesn't cover preventative care. We had a branch fall on our roof and the insurance had to pay out to get that part of the roof fixed. I pointed out that there's another dead branch up there that I'm a little concerned about hitting the roof, and maybe they would prefer to pay a few hundred to get a guy up there to remove the branch than a few thousand to get the roof repaired the next time, and the insurance company said absolutely not.

¯\_(ツ)_/¯

There are comprehensive insurance policies where you can file a claim to get a repair done. It's not cheap AND they'll raise your rates, but you can get it :)

In Germany this is usually pretty well handled, you paid a bit more for full coverage and they cover all costs of repair etc. But if you're in lots of accidents each time your insurance cost rises. If you have little to no accidents for a few years, the insurance cost sinks. It is also mandetory for your vehicle to have insurance, avoiding sudden private insolvency.

The difference is that (in theory at least), insurance will pay your full costs, regardless of how much you've already paid in. You can sign an auto insurance on one day, pay in 100$, then get into a 20k$ crash the next, and get the entire costs covered.

A retirement savings fund is capped by how much money you've put in it. You can never take out more money than you've put in (+interest/portfolio growth).

That's kinda the whole point of insurance. If you want an insurance model like described in the post, well nothing is stopping you from opening an ETF or other savings fund, and dedicating it to auto payments. It's not like you need a dedicated industry/service for that.

All insurance companies and lotteries take in huge amounts of cash and pay relatively little back. The whole economy is a scam if everyone needs "insurance".