It is hard for some people to believe, but you may still have to buy car insurance, even if you don’t own a vehicle. The reason for this is that a driver can be held liable for an accident, even if he or she doesn’t own the vehicle he or she is driving. That means you can be sued over an accident you get into driving a car you don’t own.
So some insurance companies are awash in cash and are making money. Insurance is actually a very good business. Much of Warren Buffett’s fortune was built on the money generated by insurance companies. Basically, Warren used the money policyholders invested in his company to buy other companies and get financing for acquisitions.
The best way to think of an insurance broker is as a matchmaker who tries to arrange a relationship between a customer and an insurance company. The broker does not work for the company or represent it, although he or she does receive a commission from the insurer for referring a customer to it.
If that wasn’t bad enough, the insurance coverage provided by Uber or Lyft only pays for medical costs for passengers or persons injured in an accident, such as another driver. The driver of the Lyft car might end up having to pay his or her own medical costs if he or she is injured.