Car Accident? Easy street here I come...
Insurance by definition is a pooling of risk. This means that the funds of money are used to support the unfortunate events of a few. For example, some of us may never break a bone in our entire lives but others may break several. The money, or "premiums" that everyone pays into funds the care for the sick. It is a very altruistic system. For the benefit of all individuals in our group, we'll each sacrifice a little so no one will be devestated by a catastrophic event. However, there is one factor at play here that some individuals forget about....
Insurance is NOT for gain. It is designed to put you into a place financially to where you were before, no more, no less. When a car insurance pays out of bodily injury coverage under a personal auto policy, normally, the funds are used to put you back to where you were before. For example, let's say that after the accident you need to be taken to a hospital. Someone is going to have to pay for that. The MRI that is run on your body to ensure no broken bones also needs to be paid for. When you receive a settlement payout from the insurance company, part of those funds are used to pay for those expenses.
Other additional monies received by the insurance company are generally used to offset the loss of income that you will incur do your accident (if a serious accident occurred) and the loss of income you already lost. It's not supposed to give you a head start, set you up for the rest of your life, or start a college fund for your kids. It's to put you back right where you were.