How Insurance Works. After Mrs. O'Toole's barn burned down, she called her insurance agent to file a claim. She told the insurance man, "We had that barn insured for fifty thousand bucks, and we need that money immediately!" "Just a minute there, Mrs. O'Toole," the agent replied. "Insurance doesn't work quite like that." "What do you mean?!" she said. "The policy here says $50,000!" "That's a maximum," the insurance man said. "What we do is ascertain the value of what was insured, and then provide you with a new one of comparable worth." After a long pause, she replied "That's how insurance works?!" "Absolutely," the agent said. "Well then," she said, "I'd like to cancel the policy on my husband immediately!"

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