One of my friend works in reinsurance and his favourite joke is that every time the insurance company pays a claim, someone is getting fired. Obviously a joke but it seems to paint a fairly accurate picture of how the business is run.
Vanguard(the brokerage) is structured the same way pretty much, except it's the various mutual funds(like VTSAX/VTI) that own the larger corporation. So far the infection of c-suite salaries continually growing larger and larger hasn't gotten to Vanguard yet, but they are now a few CEO's removed from the original founder(Jack Bogle), so it's probably about time that shift starts to happen.
> The people in charge(C-Suite) have zero incentive to ever refund any annual profit.
For example, in 2020:
> USAA, the country’s fifth largest property-casualty insurer, will be returning $520 million to its members.
If what you say is true, why did they return any money at all? They could easily pay that to C-suite and senior execs in huge bonuses.
Also, to clarify, the correct term is "mutual insurance", which Wiki describes as:
> A mutual insurance company is an insurance company owned entirely by its policyholders. It is a form of consumers' co-operative. Any profits earned by a mutual insurance company are either retained within the company or rebated to policyholders in the form of dividend distributions or reduced future premiums.
Certainly, they're in business to make money, and helping customers is just part of the process, not their goal.
But --- it's in the customers' interest for the company to be accurate about accepting and denying claims. If the company accepts claims that should be denied, that means higher premiums. If the company denies claims that should have been paid, that may result in the company having to pay those claims after appeal/lawsuit and possibly with penalties; penalties get paid by the pooled insureds one way or another.
Insurance fills a need and is not just an evil company doing evil. Most insurance covers risks of loss that the insured would be unable or unwilling or at least unhappy to cover themselves. For most homeowners, if their house burns down, they would be unable to rebuild without insurance, unless there was clear liability from a person or company with big pockets.
> I honestly don't think consumer insurance is worthwhile
This is consumer insurance, so your typical auto, home, renter's, etc. policies. If you need commercial or E&O coverage, ask your broker to check them against the AM Best rating list.
To get a flood policy you would have to speak to a broker about whether you qualify for the National Flood Insurance Program. They won't issue a policy to you directly.