Question by : how much money i need to start up car insurance business?
ok im licensed, i have office with experienced sales people , company name “gaico”, how much cash on hand i need to cover losses (lets say i signed 100 customers allready to gaico)
Best answer:
Answer by Thatdudenextdoor
well to give you an idea. Lets say you give insurance to only the people in the neiborhood. we will stick with 100 people. Over a year. 4 cars are broken into and 2 have a small bumper accident and one completly wrecks shop (This is a really really good neiborhood haha real life is probably much worse anyway). For the 4 broken into say you just have to replace glass at $ 500 each the small bumper to bumper accidents $ 1500 each and the total demolition 20,000. thats about 25000 or so….
So if its worse its going to cost you more.. if someone cheats you its gonna cost you more.. you need lots of cash
oh and don’t forget about 30,000+ to pay your 1 employee. your already looking at 75,000. a year. Thats 750 a year per person person… any other expenses i missed and a neiborhood with a bad year as far as accidents go.. you’d be lucky to break even charging 2,000 per person. The insurance game is tough
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