Yeah, I would expect the premium to be higher if the insurer knows there's not much incentive for the bank to protect the item. Also I consider a loss and insu

Yeah, I would expect the premium to be higher if the insurer knows there's not much incentive for the bank to protect the item. Also I consider a loss and insurance payout to be worse than no loss and no payout. Because it's a hassle to do the paperwork and rebuy items. And there might be sentimental items that a payout doesn't fully replace. So it's best to have a system that reduces the chance of a loss.