That makes sense for insurance where the "upside" (for lack of a better word) is very high - say, millions. Very few people could save millions in liquid assets

That makes sense for insurance where the "upside" (for lack of a better word) is very high - say, millions. Very few people could save millions in liquid assets, and for most of those who could, a million dollar event is still catastrophic enough that it makes sense to insure against. But, as in this case, when the upside is capped at a fairly low number, which is entirely achievable in savings for most people who could afford the premium in the first place, savings are by a wide margin preferable.