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The best description I've seen is that insurance is peace of mind. from an individual perspective, insurance means you don't have to worry about unexpected exp

The best description I've seen is that insurance is peace of mind. from an individual perspective, insurance means you don't have to worry about unexpected expenses from things beyond your control (ie, peace of mind). Now, the mechanism by which this is achieved may be described as a pool in that it's a single company with a pool of money that everyone pays into and the input into that pool necessarily must be greater than the output. But from the "customers" perspective, insurance is peace of mind. ie, it smooths their total risk over time.

vinceguidry 11y ago
"Peace of mind" is false advertising, you should not expect insurance to provide that to you. You will always have to worry about unexpected expenses, because insurance companies are never going to insure everything that could possibly happen, even if you get a good policy that doesn't dick you around on claims. If you are expecting insurance to protect you from not knowing the risks, then you are taking a much bigger risk than not having insurance at all, because of the complacency that the belief you're insured engenders.
TeMPOraL 11y ago
We have a whole subthread here about how insurance companies will refuse to pay when push comes to shove; I don't really believe in the peace of mind anymore. What I'm looking for is the ELI5 for what insurance really is about (especially from the POV of insurers) given that, if I understand correctly, 'chimeracoder is disputing the insurance-as-everyone-pooling-money model.
- mreiland 11y ago
  For some definition of "reall", amirite? people and business purchase insurance to cover unexpected loss, ie, "peace of mind". Maybe insurance companies are evil scumbags, but that's STILL the reason why people PURCHASE insurance.
- mreiland 11y ago
  For some definition of "reall", amirite? people and business purchase insurance to cover unexpected loss, ie, "peace of mind". Maybe insurance companies are evil scumbags, but that's STILL the reason why people PURCHASE insurance.

vinceguidry 11y ago

"Peace of mind" is false advertising, you should not expect insurance to provide that to you. You will always have to worry about unexpected expenses, because insurance companies are never going to insure everything that could possibly happen, even if you get a good policy that doesn't dick you around on claims. If you are expecting insurance to protect you from not knowing the risks, then you are taking a much bigger risk than not having insurance at all, because of the complacency that the belief you're insured engenders.

TeMPOraL 11y ago

We have a whole subthread here about how insurance companies will refuse to pay when push comes to shove; I don't really believe in the peace of mind anymore. What I'm looking for is the ELI5 for what insurance really is about (especially from the POV of insurers) given that, if I understand correctly, 'chimeracoder is disputing the insurance-as-everyone-pooling-money model.

mreiland 11y ago
For some definition of "reall", amirite? people and business purchase insurance to cover unexpected loss, ie, "peace of mind". Maybe insurance companies are evil scumbags, but that's STILL the reason why people PURCHASE insurance.
mreiland 11y ago
For some definition of "reall", amirite? people and business purchase insurance to cover unexpected loss, ie, "peace of mind". Maybe insurance companies are evil scumbags, but that's STILL the reason why people PURCHASE insurance.