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Insurance Explained - How Do Insurance Companies Make Money and How Do They Work

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The first 1,000 people to sign up to Skillshare will get their first 2 months for free: https://skl.sh/infographics9 How do insurance companies actually work and how do they make money? SUBSCRIBE TO US -► http://bit.ly/TheInfographicsShow -------------------------------------------------------------------------- WEBSITE (SUGGEST A TOPIC): http://theinfographicsshow.com SUPPORT US: Patreon.......► https://www.patreon.com/theinfographicsshow CHAT WITH ME: DISCORD.....►https://discord.gg/theinfographicsshow SOCIAL: Twitter........► https://twitter.com/TheInfoShow Subreddit...► http://reddit.com/r/TheInfographicsShow -------------------------------------------------------------------------- Sources for this episode: Some Images used under license from Shutterstock.com
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Text Comments (721)
PatsCelticsFan (12 hours ago)
How do they make money well....I’ve been driving for 20 years I’ve never had a accident I’ve just had 2 glass claims....average of 1,100$ a year times 20 that’s over $22,000 for about $600 worth of glass...that’s just me never mind all the other millions of customers...and then when you DO need a claim you have to pay almost half your premium for a deduction....NICE SCAM
lifesabitch90 (8 days ago)
@the infographics show I will be showing you to my 10th graders.
Iroman Captin America (8 days ago)
I did not understand
Daniel Maletic (9 days ago)
You try to explain but you dont know how to explain, much of the info are not relevant or not directly explaining the stuff. You complicated a bit, but you explain it on quite hard to understand way. You also shuld include the insurance company must have % the cilent to work with profit. 10 people insure phone, 6 lost they phone and its cover by insurance they lose money.
Max Corbett-Blaikie (11 days ago)
why do you have Victorian looking Englishmen/ Victorian London while talking about 17th century Stuart England?
Brandon Hitchings (12 days ago)
isn't obviously how they make money? the lobby Congress to make it mandatory to have it or they convince stupid people to think it's communist to have universal. collect there money, then when it comes time to pay out ether refuse under some fine print bull shit or do pay out 1/8th the value unless you pay for insurance to cover your shit insurance such as GAP or what ever ever crap allstate is peddling at extortion rate. take auto insurance I'm 32 I have been driving since I was 16, zero accidents I pay $2200 a year I have pissed away $34,000 minimum but if that day ever comes. my rates will go up, I still pay deductible and I'm still left without a car. as far as medical goes. they make you pay out of pocket to a set number say $10,000. then cap you at $100,000. my 78yr old grandmother broker her hip in January it cost $117,000 to replace. because it's communist to have universal health care in America she was hit with $27,000 bill with 11 months left in the year to hopefully not need any other medical care. BTW she can't pay that bill, but you really don't need credit when your that old so who cares if you default. homeowners insurance. I live in florida, God help you if your house falls into a sink hole, forest fire, or better yet hurricane, 3-5 years minimum for your payout. if you think I'm just prejudices, my rich uncle is vice president of a health insurance company. I stayed in his multi million dollar house in a spare room that was bigger than my whole apartment. I thought about asking to stay at his vacation house in Malibu over looking the ocean. Yeah I have hate for insurance companies.
Grey Wolf (12 days ago)
So it was the first pyramid scheme.
MrJakePrince (14 days ago)
A good high level description of the industry, a couple of slight misstatements, curious on your sources of information for the video? - Marine Cargo Underwriter in the UK
Chandra Siagian (14 days ago)
I think VOC is the first one rather than England who come out with the modern insurance (Shipping insurance) FYI
name's Zeus (15 days ago)
Why are we forced to pay deductibles and face higher monthly bills? Thats fuckef up, if im paying for insurance i need to be insured without being charged more smfh
K Mathew (15 days ago)
Geico 15 mins can save you 15% or more on your auto insurance.
durai prasanth (15 days ago)
Super bro .... Really helpful video
ChloeWade (16 days ago)
He wouldn’t only give $100 in compensation that wouldn’t pay for a new phone
Aerin Gothyk (16 days ago)
I earned my life health and accident insurance a few years ago but left the insurance business. Watching this video I was glad I was able to remember how all of this worked before pressing play. I was beginning to think I lost that information.
zachary paris (16 days ago)
insurance mostly seems like a scam.
Matthew Damoco (17 days ago)
Make a video about the car insurance company up here in Canada called ICBC. $2000 a year... Now that’s a scam.
Chase Vineland (17 days ago)
Robbing. Thugging. Cheating. Mic drop.
Lucas Becerra (18 days ago)
Don’t forget a decent phone costs $649
travesty869 (18 days ago)
Because they deny claims every way they can while you've been paying your premiums for 20 years and only 1 thing happens where they would be out money. Then they get their money back when they do have to payout from government funding and breaks.
Kyzyl alchemy (19 days ago)
Now do you kids understand why ObamaCare is bad, it iliminates competition for contracts and forces taxpayers to pay the balance, all the while insuring non workers at no cost.
macsnafu (20 days ago)
While you explained the basics of insurance and a little more, you really didn't cover the risk assessment very well. Insurance is more than just "spreading the risk". Insurance companies often group people into homogeneous groups and known statistical information about the risks (actuarial information) those groups have in order to calculate the premiums. While any particular insurance buyer doesn't know if he will need the insurance, and thus, it is a gamble to him, it's no gamble to the insurance company *IF* they've done their risk assessment job properly. They should already have a good idea of how much money they will have to pay out in a given period of time, and thus, know how much money they need to take in to cover that. Problems arise if unexpected or extreme events occur that were not foreseeable, or if a group is too small to generate consistent actuarial information. Problems can also arise when government regulations interfere with insurance and force insurance companies to insure high risk events without adequate compensation to cover the payouts. Health insurance in the U.S. isn't really "insurance" any more because of various regulations that make providing health insurance more of a gamble for the insurance company. Now, American health insurance is really more of an alternative way to pay for regular and expected health care costs instead of to actually insure individuals and families for less common and unexpected (to the individual) health care costs. This is part of the reason health care in the U.S. is so expensive, because health insurance is not an efficient way to cover health care costs.
macsnafu (20 days ago)
Some additional comments: People like to complain about insurance companies, and yes, sometimes insurance companies do crappy, unfair, and even illegal things. But insurance companies are business much like any other business, and if they can't make a profit, then they can't stay in business. Instead of simply picking the cheapest insurance company, consumers should try to pick reputable companies that are well-run, dependable, and do a good job of risk assessment to minimize unexpected events and losses. Companies that pay up when a legitimate claim is made because they already know they can afford to cover it and don't have to worry about going out of business.
elr2141979 (20 days ago)
Insurance is just a legalized scam because they have people called Adjusters who go out there just to make sure that they pay out the least amount of possible for your claim.
Alan Ramirez (21 days ago)
So there basically in debt
CezDmX (22 days ago)
Vote Democratic! This is why private companies should not be in charge of healthcare!!! Dirty PIGS
Shivam Tiwari (22 days ago)
It was really complicated but u people explained it very well.
Heraldo Medrano (23 days ago)
Another scam from the Government.
Marco Deckel (23 days ago)
Underwriter, that's funny because in German Unterschrift means signature and actually directly translates to underwriting.
matte espo (23 days ago)
As a training actuary i approve this video.
comedyman112 (24 days ago)
stop saying underwriter ffs.
bieight8 (24 days ago)
British drink tea!
SamsungLG (25 days ago)
So basically this is just gambling and legalized, situational Ponzi-Scheme.
r. jay26 (25 days ago)
self insured is the best way to go
Redstoner KBC (25 days ago)
How do insurance companies make money... I assume by the same way all companies make money, by lobbying lawmakers to make it law that you HAVE to buy their product.
Pensive (25 days ago)
Why should I ensure my boat if I die?
clickstan (15 days ago)
Pensive So your family gets money if you die
Air Elegant (26 days ago)
Knowledge that can't learn from any school
Sho Bud (26 days ago)
how do u invest in fortune 500 companies????
Marla Cookie (26 days ago)
skillshare could be a scam I don't trust them
millenniumdragn (27 days ago)
Insurance is a scam.
You_tuber (27 days ago)
so it's like a legal ponzi scheme?
You_tuber (27 days ago)
so it's like a legal ponzi scheme?
DoitformyWeed (27 days ago)
I would only insurance my ps4
Skaz 1 (27 days ago)
Homie better have pirate insurance out here!
Scriptminer (27 days ago)
Awesome video!! Thank you!
Chalee Johnson (27 days ago)
Isn't this just a legal ponsie scheme
abhishek saxena (27 days ago)
This is why I subscribed ur channel 😃🤗
ismael aubry (27 days ago)
Spending level retain arise envelope rest witness marriage boyfriend surprisingly
Tom Frazier (27 days ago)
A good explanation of insurance companies is given i a John Grisham novel. I am not a Socialist, but take a dim view of ins. cos. & their power. They collect oceans of money, then play the stock market, and gain money even more, and the power that can come with it. What's with these cute & sympathetic illustrations of business turds? And I wondered where the fury of Communist militants came from.
Paul King (27 days ago)
You will know what insurance you have when you go to make a claim. Ooops, preexisting condition - claim denied! Insurance companies get rich off your fear. Research, research, research your insurance company to confirm that they operate in a ethical manner. Good Luck.
301steady (27 days ago)
So, what happens when one ship, that the client has, doesn't pass inspection; and, after inspections, the client changes badges? Like how the Titanic and Olympic swapped identities.
Vegarot Fusion (27 days ago)
So it's a Ponzi scheme with a twist. You don't have to pay back your investors unless something goes wrong for 1 of them. Then you invest it and the returns you keep. Superannuation companies do the same thing. Crooks
Jomo Mercury (27 days ago)
By not paying claims
Kyle Coultas (27 days ago)
Key phrase: SCHEME
Kyle Coultas (27 days ago)
Doesnt the cell phone example sound like bullshit? Fuck insurance!
Magaly O'Neill (27 days ago)
This was very well explained. Thank you!
Henrico van Heerden (28 days ago)
Still confused as fuck
Aaron Venia (28 days ago)
All insurance is a scam and can never be a legitimate business. All businesses either sell a product or a service in order to make profit. Insurance's product is their profit. In order to make profit, they must restrict the amount of money they distribute. This is why the you see commercials all the time for those Jew lawyers, the Bernsteins, trying to sue them.
Barry Sorento (28 days ago)
Insurance is a scam
Josue Cruz (28 days ago)
Learned more than a years worth of school.
Randomcrap666 (28 days ago)
The insurance company gains money from the hospital and since the hospital owe a lot of money the hospital bill prices increase a lot
rdesvarieux (28 days ago)
Ponzi scheme
victheboss_7 ! (28 days ago)
Interesting.......
Th4tGuyII (28 days ago)
So essentially an educated gamble? They take on liability for people's assets (should they be destroyed/lost under valid circumstance) knowing that most people will not need to claim on this liability, therefore they will profit as long as most people do not claim (hence why they are so strict about the circumstances required for a claim to be valid).
Yayan Fauzi (28 days ago)
And that’s Riba.
FireballFarts (28 days ago)
Insurance is such a sketchy industry. They make money by lying and bending the rules.
Toxin (28 days ago)
Sometimes i like to cover myself in dirt and pretend that im a carrot.
Justice Warrior (28 days ago)
It's easy, make your products a law that you can't escape. Then get really good lawyers and pay as little to non!!
Arthanza McGhee (28 days ago)
Sounds like a legal Ponzi scheme.
Hanisha Bhojwani (28 days ago)
Can you make a video on how warranty works?
M Qayyum (28 days ago)
They charge you more than they pay back
Lord Penguin (28 days ago)
I have come to three conclusions to describe the majority of this comment section. 1. A bunch of kids that don't understand economics, or how insurance works even after watching this video. 2. A bunch of people who think it is a scam because they buy partial policies, and are probably high risk (which is all on you) 3. A bunch of socialists, or individuals who think everything should be handed out to them because of their failures to be financially aware. That way they never have to be accountable for their failures. Which a good portion of the comments have something to do about scams, refusing claims, going to court, and how insurance companies should be non-profit
InsaneFirebat (28 days ago)
Insurance is a scam.
spencer hawk (28 days ago)
If you actually don’t know how insurance works by 16, you are a dumb motherfucker.
Mutinta Munyungano (28 days ago)
I might as well just make an insurance company. This is low key gambling and hustling.
Annonymous (28 days ago)
What program / software/website do you use to make these infographics ???
Sticky Vloggers (28 days ago)
Make is it safe to live in IRAQ
David Gossett (28 days ago)
"Go about there personal and business "LIF-roahlnd" and spreading that risk from financial ruin..."
IamRayson (28 days ago)
Can you do a video on regulations on insurance companies between various states and federal government?
Cineva in comentarii (28 days ago)
2M subs , 1000 first persons who use skillshare get it free *why*
Medell (28 days ago)
In puerto rico many of insurance was deny a lot of cleints or give little money when hurricane maria destroy PR, and worst some of then refuse to paid the client because depend how was destroy your stuff and claim was "Act of God"
Anvit (28 days ago)
Make video on stocks
justin rinehart (28 days ago)
Great video, and wow for the first time the ad sponsor commercial is actually useful!
Jean francisco (28 days ago)
This fucking channel lots of ads unsubs ! Now !
Parker Katsuya (28 days ago)
adblock is free . stupid
danny3902 (28 days ago)
How is this even a question??? Lol! Overpriced premiums that’s how
Pablo Linazi (28 days ago)
Insurance is a huge scam you pay thousands and thousands of dollars to a for profit company who only cares about making money and only exist to make money
Robert Gardner (28 days ago)
Yeah but bob didn’t get him a new phone. In fact....bob gave him $5 of that 10. IF BOB DECIDED TO GIVE HIM ANYTHING AT ALL
Ashton Morris (28 days ago)
I’m just glad this isn’t a negative video. Lately it’s all been death, plane crashes, or murderers. Like damn infographics i just wanna enjoy a video not think about sad things 😅
Ashton Morris (28 days ago)
The Infographics Show To me it feels like there have been a lot of negative videos (head getting cut off, falling in acid, unethical business schemes) I’m not saying ALL of your videos have been negative, but there have been enough for me to notice but I mean whatever I guess I won’t comment my feelings anymore 🤷‍♀️
The Infographics Show (28 days ago)
No they haven’t been. Out of the last 14, maybe 3 are like that.
ching wik Huang (28 days ago)
lol insurance company is a ponzi
Jack Binns (28 days ago)
Audio problems
Kerem Efe Çakıl (28 days ago)
Can you explain how sponsored videos work as well?
Mark Jetron Valencia (28 days ago)
why am I watching this? I'm not even old enough to work
House Of Cards (28 days ago)
What a vid
BigDanos (28 days ago)
What was the greatest city that burned down ?
Il MEGALODON lI (28 days ago)
Living in florida, we are prone to water damage. My insurance doesnt cover water damage and they charge an extremely high premium that you could honestly use to fix the problem yourself. So to me, my insurance is just a scam as they deny any kind of help and if you put in 2 claims in a year they drop you off their policy.
Julian Börner (28 days ago)
Wait... You Americans don't know how insurance works? In Germany its just something you know even without school O.o
seane113 (28 days ago)
Fuck insurance, payin 200 a month for liability
Victor Kidd (28 days ago)
Insurance is insurance for insurance
Once you hand your money to smbdy, don't ask what they use it for to generate even more money and don't fool yourself expecting them to return.
Narcisa Constantin (28 days ago)
Every day is actually SS MounTain WhatTheFuck (SSMTWTF)
MrMorrigan (28 days ago)
Who did not know how work? Thought everyone knew this oO
15october91 (28 days ago)
Actuary

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