This is actually not true at all. State Farm has a net loss on insurance in OK for the last 10 years. They are actually ok with breaking even on premiums. The money they get from premiums is invested in different ways and that is where their profit comes from. Certain types of insurance and probably most warranty programs for sure are profit generators but that is not the case with all insurance.I look at it like this. The car MIGHT break down. It MIGHT cost you.
If you buy the warrantee, it DID cost you.
I have looked at it like this for insurrance as well.
In 46 years, i am waaaay ahead money wise because of it.
Like someone said earlier, these policies are profitable. If not, why would they be offered?
Folks are usually smart about casinoes. They understand the odds and keep their money. Warranties and insurrance policies are EXACTLY like the casino odds.
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