How does insurance work?

How does insurance work?

HomeConcerning RealityHow does insurance work?
How does insurance work?
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Insurance is the annoying necessity we all pay for to make sure we don't end up with massive debt if our house burns down, we get into a car accident, or something tragic happens.

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Insurance helps us have peace of mind, knowing that even if something bad happens, someone else will pay to fix it. However, to the untrained eye, it can seem a bit confusing. I mean, if you pay $200 a month for home insurance and after only 6 months your house burns down, the insurance company will buy you a new house, probably for hundreds of thousands of dollars. But you would have only given them 1,200. Why would they do that? That's the power of confidence, baby.

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CGI Snake by Chris Zabriskie is licensed under the Creative Commons Attribution License (https://creativecommons.org/licenses/by/4.0/)
Source: http://chriszabriskie.com/divider/
Artist: http://chriszabriskie.com/

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