> This isn't true. Insurance companies make money from float too which allows them to run on a loss when only comparing premiums to claims.
You know what we call a business that makes enough money on float to cover its operating costs? A bank.
If the float was so lucrative they wouldn't need to charge "high enough to matter" premiums.
Insurance companies don't have magical investments they can make that other businesses can't. They're not going to be making $0.50 on the dollar you give them. They're going to be making pennies, just like literally everyone else. This will mostly go toward subsidizing operating costs. In no universe do insurance companies make enough profit from their money pile to even come close to offsetting payouts.
The fact of the matter is that theft affects the entire area so it WILL be reflected in premiums, the same way things like the climate and adverse weather are reflected in premiums.
>It should be obvious that insurance serves as financial benefit for the insured or else the insurance industry would have collapsed a long time ago.
Using insurance to cover routine expenses never makes financial sense. There's a reason businesses self-insure as much as they can.
Just because a financial product can be a net win doesn't mean that it will still be a net win if you use it exactly the wrong way. Speaking of things that should be obvious...