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Things like insurance, home and auto need to government run and not for profit

The biggest thing with auto insurance isn't covering your car, it's covering the cost of whatever you hit sueing you.

Your car may only be worth $3,000, but if you hit a pedestrian and they require a dozen surgeries and are wheelchair bound for life, you bet you're ass you're getting sued for a few million in medical costs.

In a reasonable country, those medical costs would be free, but since they're not you need some sort of protection against once accident bankrupting you in civil suits.

Then if you are in an accident or something happens to your car, they'll try not to pay out and even if they do, they'll make you pay even more every month, regardless of whether the accident was your fault or not. Oh and you have to have it where I live or you're breaking the law.

One car insurance company where I live operates kinda like this. USAA.

Every subscriber is a member. Every year, after they pay operating costs, they take the money left over from premiums and put it into accounts distributed across all the members. When you reach a certain age you can withdraw the money accumulated in your account.

The idea is that what you pay goes to a fund that is used when the insurer has to pay a client, therefore socialising the costs of fixing whatever the clients insured.

If every client could get their money back, the company would likely have less money available for the payouts (and would risk everyone taking their money out once a big payout is due), and might go bankrupt if too many payouts come up at once.

So instead the idea is that ideally you end up paying less than you'd get if you needed to fix whatever you're insured for... but it's like a bet: you bet that shit'll happen before you've paid more, the insurer bets that it won't.

Of course, though, like in all businesses based on gambling the house always wins.

Even if they weren't scamming you, they've got actuarial tables telling them how much you have to pay to make sure they'll have a certain amount of profit... but of course they are scamming you, and they'll do everything possible to avoid paying you even in the unlikely event that you fall on the wrong side of the actuarial table.

The difference is that (in theory at least), insurance will pay your full costs, regardless of how much you've already paid in. You can sign an auto insurance on one day, pay in 100$, then get into a 20k$ crash the next, and get the entire costs covered.

A retirement savings fund is capped by how much money you've put in it. You can never take out more money than you've put in (+interest/portfolio growth).

That's kinda the whole point of insurance. If you want an insurance model like described in the post, well nothing is stopping you from opening an ETF or other savings fund, and dedicating it to auto payments. It's not like you need a dedicated industry/service for that.

How about the fact that home insurance doesn't cover preventative care. We had a branch fall on our roof and the insurance had to pay out to get that part of the roof fixed. I pointed out that there's another dead branch up there that I'm a little concerned about hitting the roof, and maybe they would prefer to pay a few hundred to get a guy up there to remove the branch than a few thousand to get the roof repaired the next time, and the insurance company said absolutely not.

¯\_(ツ)_/¯

Insurance is a brilliant, beautiful idea. People come together to pool resources so that in the rare event that a catastrophe befalls someone, that unlucky person does not lose everything.

The idea of insurance went wrong when for-profit companies were allowed to get involved. Public insurance is cheaper and better. I'm not sure if it is still the case today, but until a few years ago public insurance in Saskatchewan cost a couple hundred bucks a year while people in other provinces were paying $1500 for the same coverage.

Wait to get hit?

I don't think you're doing it right.

Step 1 make sure you have gap insurance.

Step 2 never make more than the minimum car payment.

Step 3 when your ready for a new car, side swipe a car on the left and drive into a brick wall on the right. Make sure there are no cameras.

Step 4 enjoy your new car.

Step 5 commit identity fraud so you can keep a low insurance premium!

Step 6 do none of this because it's all crimes. I really hope you read the instructions to the end before starting.

There is plenty to criticise about insurance companies, how did they stumble upon the one thing that is fine?

It's not a scam, it's just how companies work. By definition, every insurance will pay out less than they collected in payments. They have to pay their employees, their offices, taxes an yes, also their shareholders. That's why, on average, insuring something is always a loosing bet.

You should only insure yourself against things that are potentially threatening your or your family's existence: Liability, health, home, occupational disability, survivor benefits. For everything else it's almost always better to just put the money into an account to have it at hand in case.

All insurance companies and lotteries take in huge amounts of cash and pay relatively little back. The whole economy is a scam if everyone needs "insurance".

The point of insurance is to protect your standard of living. If you can absorb the loss of something then you don't need insurance for it(game controller for example). Most people can not absorb the sudden loss of a car(or house). So a company takes on the risk for you for a fee. That's the general idea anyway.

I self insure. I keep my state minimum and pay what I would pay in collision to myself in an interest bearing acct until I reach the replacement cost of the vehicle. Took a while the first time but after those first few years it has been worth it.

My bicycle theft insurance also pays for regular checks, and routine repairs.