The risk depends on your net worth and earning power, as you allude to. Your net worth might have low variance if the ratio between it and your car's cost is hi

The risk depends on your net worth and earning power, as you allude to. Your net worth might have low variance if the ratio between it and your car's cost is high. This is the most precise way to phrase the original recommendation. Don't get insurance for things that are easy for you tolerate the variance on. That can be true if you buy a cheap car and are pretty well off. What's the actual chance your car gets stolen 3 times in a year? After the first 2 times maybe you could change the place you store your car, get a GPS tracker or something? There were 6858 vehicles stolen in NYC in 2020 (nearly doubled 2019) [0]. There are roughly 2M cars registered in NYC [1]. That's a 1 in 300 yearly chance to have your car stolen at least once. If we assume events are uncorrelated, there's a 1 in 100000 chance of two or more thefts, and a 1 in 25000000 chance of three or more. The odds of dying in a motor vehicle accident in the next year is something like 1 in 8000 [2]. That aside, there's all sorts of optional coverage that most people definitely can tolerate the variance on without calculation. > You can't just be chasing the positive EV when the variance is potentially large. There are many investment strategies that are exactly this. Writing options is one example. Forgoing insurance, like option writing, isn't possible without sufficient collateral of your own. I recognize that this is not possible for everyone. There are some cheap cars that work fine though. The biggest takeaway is to second guess the sales pitch on premium insurance plans. Your example is another instant bankruptcy case, with reward that doesn't come close to compensating the risk. [0]: https://www.nytimes.com/2021/01/06/nyregion/car-thefts-nyc.html https://www.nytimes.com/2021/01/06/nyregion/car-thefts-nyc.h... [1]: https://dmv.ny.gov/statistic/2018reginforce-web.pdf https://dmv.ny.gov/statistic/2018reginforce-web.pdf [2]: https://www.iii.org/fact-statistic/facts-statistics-mortality-risk https://www.iii.org/fact-statistic/facts-statistics-mortalit...