The payout is the risk you transferred to the insurance company. You’re not “supposed” to get all your premiums back because then why would anyone start an insurance company? Its not a bank account, its more like a lottery ticket. The insurer assumes risk of covering an accident in exchange for the guaranteed income of your monthly premiums. In return you exchange a fixed regular payment for protection against an unlikely event. In order for this arrangment to work, the insurer must make a profit.

You might understand this but many people today do not, which is why they expect medical insurance to cover 100% probability events like an annual checkup with the primary care physician.

I'm not asking for my premiums back and don't expect it. Just saying that after 5 years of premiums the insurance company would be break even on that policy. If premiums are high enough its not really insurance. Not that everyone has the same insurance company but generally if everyone has paid premiums that meet the value of the car after 5 years then all of the insurance company risk is with cars less than 5 years old. The insurance company will keep pushing for more intrusion into your life to 'give you the best rate' but really you'll just pay more. Like you said if it wasn't profitable then no one would do it. Making apps and integrating with telematics doesn't come for free and its not coming out of the insurance company bottom line.

well how much capital are you investing for 5 years at zero percent return? I think if that was required for an insurance company there would be no insurance companies.

> Making apps and integrating with telematics doesn't come for free and its not coming out of the insurance company bottom line.

yes, it is. their bottom line has to make room for that by increasing prices. in insurance as in anything, you get what you pay for.

I believe most insurance also covers the damage done by your vehicle to other property. So the upper limit on the total collected through premiums is somewhere between 0 and the cost of an expensive house.

It's actually more along the lines of whatever a person's life is worth. Also where I live the ~3 cars around me in traffic could each cost more than a nearby home. You can pretty easily destroy $400,000 of property here in an otherwise uneventful accident.

Automobile deaths has been declining for years. https://en.wikipedia.org/wiki/Motor_vehicle_fatality_rate_in...

Cars are safer than ever. https://one.nhtsa.gov/nhtsa/timeline/index.html

The folks with those fancy cars are paying into the system too, insurance is about pooling after all.

It seems you have a point about bodily injury claims. https://www.insurance-research.org/sites/default/files/downl...

However, it looks like that is mostly due to more lawyers being involved in bodily injury claims. More lawyers involved points to a failure with insurance company's ability to properly adjudicate claims. When insurance is only about profits and finding tools to further squeeze your existing clients no one benefits. Insurance companies do not need more ways to rate me, they just need to do the job they get paid to do.

I don't really understand the point your are trying to make? You state that "insurance is about pooling" then correctly observe the dollar amount they charge you is just some sort of risk rating assigned to the individual.

Also if you ever have a large claim paid, you'll quickly discover it isn't about pooling at all. Every insurer will simple decline to quote you or simply quote you some insane price. Even without accidents I once got a quote that was obviously a response of "please do not purchase this policy" when I tried to get basic liability insurance.