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> insurance is specifically about transferring risk from people who can't handle it to those who can. It is probably true for eg. real estate insurances, but t
by marklgr 10y ago
> insurance is specifically about transferring risk from people who can't handle it to those who can.
It is probably true for eg. real estate insurances, but there are also quite a lot of extremely overpriced insurances for all kind of products (eg. cellphone) that people certainly can afford to lose, but they are fooled by loss aversion and hyperbolic discounting.
- beefman 10y agoOr they're not fooled by them. E.g. they know they'll incorrectly discount the regular savings deposits in the future, so they buy the insurance contract as a commitment device.