Scenario: I pay X amount of dollars per month for car insurance. I have all 4 tires stolen from my vehicle overnight. I submit a claim with my insurance company to repair any damages. I now pay a **hefty** X amount of dollars for the event that has occurred.
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Lots of comments about how a deductible changes your premiums or keeps you from submitting small amounts.
It’s worth expanding a bit that insurance works best to cover rare but impactful events. Frequent events can’t be pooled well with other policies. At no profit you would just be paying the same amount to your insurance company as you do to self insure these common risks. Pooling is the basis of insurance… Spreading a risk across a large number of policies knowing you will pay some big claims but avoid paying for the minor scratches and dents every car gets.
Some insurers will have coverage options to wave deductibles on large enough claims as the events are rare enough that you can spread the cost of that deductible around and barely raise premiums.
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