Not quite: one of the usual characteristics of insurance is the existence of an insurable interest[1]: you must personally have exposure to the risk before you

Not quite: one of the usual characteristics of insurance is the existence of an insurable interest[1]: you must personally have exposure to the risk before you can take out insurance against it. So insurance is really changing a large occasional negative payoff into a smaller more consistent one. [1] https://en.wikipedia.org/wiki/Insurable_interest https://en.wikipedia.org/wiki/Insurable_interest