Why Can't Get Money Back After Cancel Ins if Never Needed It?

[Bertolinoins]

Suppose that I had car insurance for ten years and never even once needed the ins company to pay for something I did and then after 10 years i decide i don't wanna drive/wanna switch companies. why shouldn't the insurance company give me all my money back besides what they needed to make their company function(ads/pay officeemployees/etc)
??

How about if you caused an accident that was much more than you paid in over the 10 years and they could come back after you for the difference? Would you take that deal? Insurance is a risk transfer contract... you pay small amount (premium) to purchase a large amount of coverage. If you really dislike insurance and think it is a bad deal... post $35K at the DMV and self insure.

 

[DHK]

Suppose that I had car insurance for ten years and never even once needed the ins company to pay for something I did and then after 10 years i decide i don't wanna drive/wanna switch companies. why shouldn't the insurance company give me all my money back besides what they needed to make their company function(ads/pay officeemployees/etc)
??

Why can't I get the last 10 minutes of my life back from reading this and your other posts?

Oh yeah, because once it's spent, you can't get it back.

 

[FLInsa]

Drank235:

 

[Dave020]

Drank235 has an interesting concept, actually.

Would you, Drank235, be willing to pay a significantly higher monthly premium on your auto insurance if, at the end of your ten-year term, you got back your premium or your premium plus some interest?

Let's say your monthly premium with no refund is $100. So over 10 years you pay 12,000 in premium which is a sunk cost of being insured.

Now, what if you could buy the same insurance coverage for $400 a month, which over the 10 years would cost you 48,000 in premiums. But, at the end of the 10 year period, assuming you had a really good claims record, the insurance company would offer you either a return of your premium plus earnings (say $80,000) or 20 more years of free, paid up auto insurance.

If the second option WERE available, would you take it?

 

[souldeux]

Drank235 has an interesting concept, actually.

Would you, Drank235, be willing to pay a significantly higher monthly premium on your auto insurance if, at the end of your ten-year term, you got back your premium or your premium plus some interest?

Let's say your monthly premium with no refund is $100. So over 10 years you pay 12,000 in premium which is a sunk cost of being insured.

Now, what if you could buy the same insurance coverage for $400 a month, which over the 10 years would cost you 48,000 in premiums. But, at the end of the 10 year period, assuming you had a really good claims record, the insurance company would offer you either a return of your premium plus earnings (say $80,000) or 20 more years of free, paid up auto insurance.

If the second option WERE available, would you take it?

When you put it that way, it doesn't sound nearly as crazy. It works for ROP term - interesting idea.

 

[Norwayguy]

When you put it that way, it doesn't sound nearly as crazy. It works for ROP term - interesting idea.

Except whats the chances on keeping the car for ten years. Some other issues in the case of LI your normally purchasing a 20 30 year level term. With Auto Insurance rates tend to change over time. How would you stop the carrier from just drastically raising rates to get you to drop the policy and lose the benefit of the majority of the ROP. Also with Life normally your looking once again at a 20-30 year period of time, how oftern does an insured stay with a company for that length let alone that policy.

 

[Dave020]

The analogy was not to ROP term. Here's the hint:

return of your premium plus earnings (say $80,000) or 20 more years of free, paid up auto insurance

I would have called it "reduced paid up" for life but I am not sure you could do that with auto since you probably have changed cards a couple of times and would not want to reduce the coverage. Plus, some life plans have full paid up on short-pay premiums (10-pay and so on). Consider the $80,000 something we might call a "cash surrender value".

Of course there is a third option but it really isn't practical since the second option is also not available. A person could opt for the $100 auto premium and "invest the difference" in an outside investment which may or may not outperform the option 2 auto policy.

 

[arnguy]

Dave, I didn't know you are old enough to be USAF Retired. i thought you were just a kid. Welcome to the senior's society.

 

[Dave020]

Just a kid a heart LOL. Turned 51 last March!

Just received my USAFR retirement notification on Thursday.

 

[Frank Stastny]

Dave, I didn't know you are old enough to be USAF Retired. i thought you were just a kid. Welcome to the senior's society.

You sound like you are going to sign him up for AARP. Please tell me it ain't so!

I'm not sure I will sleep as well tonight knowing Dave is "retired".

Dave, thanks for the sacrifices you and your family made to keep Jacqueline and me safe. We very much appreciate it.