How Does My Auto Insurance Company Make a Profit?

Nevada Insurance Enrollment Explains Auto Insurance Companies and Their Investments

LAS VEGAS - nvtip -- Have you ever wondered how an auto insurance company stays in business? At first glance, it seems like a no-brainer; obviously, they make money because they sell a product that people are legally required to purchase. But consider this: the average person pays around $900 a year for auto insurance. That sounds like a hefty amount, but it's nothing compared to how much a single car accident can cost.

For a minor car accident involving two vehicles, an insurance company could easily pay out double, triple, or many many times over your annual premium. If there are bodily injuries involved, tens of thousands of dollars or much much more could be paid out.

You're hoping that you won't have to actually use your auto insurance, but if you do, it will have easily paid for itself after just one accident. Not surprisingly, many auto insurers pay out more for claims each year than they bring in from premiums. So just how do they stay in business without charging sky-high premiums?

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Nevada Insurance Enrollment
4260 W. Craig Road suite #150-A
North Las Vegas, NV 89032
(702) 898-0554

Nevada Insurance Enrollment
Shelly Rogers

Source: Nevada Insurance Enrollment
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