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How do car insurance companies make money?
I'm curious, how do car insurance companies stay in business?
Emily Richey · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
“There’s a common perception that
car insurance
companies make money by charging more for premiums than they pay out in claims and expenses. But they don’t often make money by underwriting policies. Instead, they take the premium dollars they collect from policyholders and buy up investments. Their money comes from the interest and profits generated by these investments.”
View full answer
- Gregory R.
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