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20 July, 16:14

Where do insurance companies get the money to pay for losses suffered by their customers?

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  1. 20 July, 16:34
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    Through the Insured premium paid

    Explanation:

    Insurance is a form of contract where the insureds are indemnified by the insurer against potential future losses.

    The primary way through which insurance generate money is through the premium, which is the amount of money that is periodically contributed by the policy holders. This premium is thereafter re-invested into other profit generating investment portfolio.

    It is from this that the insurances pull out money for compensation for losses suffered by their customers whenever there is one.
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