2 ms·
It's not like gambling, it is gambling.
by shmerl 5y ago
It's not like gambling, it is gambling.
- IkmoIkmo 5y agoI wouldn't say so. In gambling you bet $10 in the hope you'd win $100, if you don't, you'll be very unhappy. In insurance you pay $10 understanding you may otherwise lose $100, but whether it happens or not you're now quite indifferent to. I'm not happy or sad if I pay premiums for years without necessity, nor happy or sad if I pay premiums and I am covered by insurance when a loss event happens. I'm not gambling in the hopes of a potential event that occurs, or doesn't occur, I'm insuring so that I'm indifferent. Gambling increases risk, insurance decreases it. The Expected Value (EV) of spending $10 to have a 10% chance of winning $100, vs spending $10 to prevent a 10% chance of losing $100, might be exactly the same, but the risk is entirely different. In case A there's 9 losses (cost>EV) and 1 win (cost<EV), in case B the cost=EV every single time, that's what it means to reduce risk. It's very different from gambling in that sense.
- JumpCrisscross 5y agoGambling is a hedonistic enterprise. If you get a thrill from buying car insurance, I guess it could be considered gambling, but for most people it’s more akin to a chore.
- shmerl 5y agoIt's more of a gambling for insurance companies.
- JumpCrisscross 5y ago> more of a gambling for insurance companies They’re taking risks with the expectation of upside. They are not doing so hedonistically. If you remove the hedonistic part of the definition of gambling, every human activity involving uncertainty—from getting in a car to changing pet food brands—becomes gambling. That isn’t a useful definition of the word.