If a customer buys insurance, how will the insurance company record it?

  • by Xyz ABC
  • Jul 25,2016
  • 5 answers

If a customer buys insurance, how will the insurance company record it?


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Insurance Answers (5)

fcas80 6 months ago

Debit: Claims Paid
Credit: Cash

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Casey Y 6 months ago

What cheating? What are you talking about?

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jmm2112 6 months ago

You do not appear to understand how insurance works. It's about pooled risk.

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mbrcatz 6 months ago

It's not. Insurance is NOT a "savings account" for each person. It's more like a bucket - everyone pays in this year, all the claims this year, are paid out from the bucket.

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car253 6 months ago

If you have a claim that cost more than your premium the company loses. But all the money collected from customers goes into a big pot of money and those that have claims the money is pulled out of that pot of money.
That is why when insurance companies pay out in claims more money than they take in (your money) in premiums, they have to raise their insurance rates to keep the company from going bust. Insurance companies do not raise rates because they want to. They usually have to because customers have too many claims.

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