Insurance companies basically print money. The concept is that they take in money and later pay the same money out in claims. During the period they have the money, they can invest it and use the proceeds of that to pay their bills and to make profits. Larger insurers, like GEICO, might have 50 billion that they have taken in and not yet paid out in claims. That’s a lot of money to be making interest on.
Even still, insurance is important to individuals. You can pay some money every month and, if a disaster happens, the insurer can pay you whatever that thing was worth so you can buy another one of it. It works mostly the same regardless of the type of insurance it is. The biggest differences between different insurances come when contracts are “maybe pay” vs “definitely pay”.
The definitely pay contracts tend to be life insurance contracts (you will definitely die at some point) and they tend to be a lot more expensive for that reason. Maybe pay contracts tend to be a lot cheaper, because maybe only one person in ten will crash their car in a given year so as long as they make enough from the ten to pay for the one, that’s good enough.
The important thing to understand about insurance is that insurers are typically very conservative. In other words, it is a really good idea for them to guess wrong on the “take too much money from you” side and much worse for them to guess wrong on the “don’t take enough from you” side. You can expect to pay them more than they pay you.