You can imagine how quickly it can be drained by one major disaster. That's enough to suck the pool, if not dry, at least to ankle depth. In fact, many insurance companies do not even make a profit on the premiums they receive as compared with the money they pay out in claims and spend to operate the business. Rather, their profit derives from their investments. In fact, this is one of the most common misconceptions about insurance.
Consumers complain that they faithfully pay their premiums year after year.
It's a familiar, and understandable, litany. Another common misconception is that insurance covers every misfortune that might befall you. If that were the case, no one could afford the premiums. Neither is insurance intended to be a maintenance policy, so don't even think of contacting your insurer if your aging roof leaks and damages your broadloom, or your sofa gets ratty from wear and tear. Nor is it intended to cover minor losses that consumers could afford to pay for themselves.