we all've heard, now-a-days, without
insurance you're as good as broke.
Just as without Auto Insurance
you'll end up without a car, the
vacation you've been waiting for
so long or worse yet, without
Auto Insurance game is very efficient.
It amazes me how it's all worked
out, all the details are planned
out. No waste anywhere. Why am
I talking about this? Well, this
actually pertains a lot to my
field, salvage auto repair and
one gets Auto Insurance, he expects
his investment or satisfaction
to be protected from damage. A
payment is made every month for
a year, two years, five, ten years.
What if a claim is never made
on the policy? Or what if it is
made on the second day? How does
the Auto Insurance company deal
I said before, it is all in the
master plan. When a payment is
made on a policy, it goes into
a funds pool. Every claim then
gets pulled out of that pool.
Every month millions of people
make payments into this pool but
only a fraction of them make a
claim. Overall the Auto Insurance
company makes a hefty profit.
a car is damaged, the Auto Insurance
company usually gives the owner
a choice, either to repair the
car or trade the car in for a
new one. When the car is traded
in for a new one no one cares
what happens to the damaged car,
for all most know, it gets pressed
and shipped to Japan to recycle
and make a new vehicle. What most
do not know is that when the damaged
car leaves it's owner and gets
transferred onto the Auto Insurance
company's hands, 50% of these
cars get a new life in the used
Auto Insurance companies auction
these cars off to used cars dealers,
used car parts yards and rebuilders.
Every week hundreds of thousands
of these cars get auctioned off
all across the world. Just here
in my state (Washington) we have
6 Auto Insurance auctions and 2
more in Portland, Oregon. These
auctions sell 200 to 400 cars
each every week.
Auto Insurance company will buyout
a damaged $15,000 car from the
owner for $2,000 to $3,000 and
sell it at the auction for $4,000
to $5,000, making a nice profit
there too. The dealer or a rebuilder
will buy this car at the auction
for $4,000 to $5,000, invest another
$2,000 to $3,000 in parts and
labor to repair it and then sell
it as a used car for $11,000 to
$12,000. The new owner will get
Auto Insurance for this "new"
used car and the cycle starts
all over again. Good thing we
to see how many times a car has
been through this cycle.
is article may not be as accurate
on how auto insurance works overall
but this is how it looks from
my point of view, an interresting
read. From my side of the industry,
the insurance rebuilding field
this is what I see. It makes sense.
And so this article was meant
as a point of view and an exaggeration,
not as an accurate reference.