Thursday, October 8, 2009
Why Buy Insurance
By: Scott Graulich
The Insurance industry is all based on one factor- managing risk. Insurance companies use statistical analyses to determine the chances of accidents, hurricanes, floods, fires, etc. By studying these statistics they can determine how much to charge customers in order to make a profit. When there are a lot of natural disasters in any particular year, insurance company profits go down and may even show a loss.
Basically Insurance Companies hope that life is boring for it's customers-- which means that no one has any natural disasters or accidents to worry about. Generally this type of situation makes the customer and company very happy. However, human nature being what it is, this happy customer starts to wonder why they are paying all that money for nothing. Actually, what we pay for Insurance is a good nights sleep.