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This is actually terrible advice based on naive assumptions. Insurance has a cost of capital and cost of operations just like any other business. You are not ge

This is actually terrible advice based on naive assumptions. Insurance has a cost of capital and cost of operations just like any other business. You are not getting ripped off. Even the very best mutual companies charge basically the same rates as public for profit insurance companies. The industry is well regulated and ensures margins aren’t indulgent. Some of the best performing public auto insurance companies are lucky to land a 97% combined ratio, i.e. a 3% profit. Home insurance is fairly similar with slightly better margins but many insurance companies aren’t making much more than a nickel on each dollar that they bring in and most are lucky to break even. Sure there are plenty of things insurance companies can do better. Lemonade, Hippo, Root and many other high profile disrupters are out there spinning BS about how evil the industry is while profiting first and/or burning other peoples money to recreate the wheel while they are otherwise not breaking even, i.e. not viable long term.

jopsen 5y ago
> The industry is well regulated and ensures margins aren’t indulgent. Home insurance, auto insurance are often very competitive. But these days it's common when you buy a TV, phone, laptop, that the checkout button online also offers "insurance". I see the same renting a vacation home, offer for a cancellation insurance. Sure, it sucks if I'm sick and need to cancel my vacation and I can't get my money back -- but insuring against such events is often a bad idea. There is a lot of unnecessary "insurances" being offered to consumers today. For the record: health, home, auto, travel, disability, and generic liability insurances is usually a necessity. What author is saying is don't insure against spilled milk, even if many shops offer these easy add-on "insurances" at checkout. Personally, I sometimes find it hard to know what I should and should buy when renting a vacation home or car. I don't care for the cancellation insurance, but I do want a liability insurance (which most always include automatically, at-least where I live).

jopsen 5y ago

> The industry is well regulated and ensures margins aren’t indulgent. Home insurance, auto insurance are often very competitive. But these days it's common when you buy a TV, phone, laptop, that the checkout button online also offers "insurance". I see the same renting a vacation home, offer for a cancellation insurance. Sure, it sucks if I'm sick and need to cancel my vacation and I can't get my money back -- but insuring against such events is often a bad idea. There is a lot of unnecessary "insurances" being offered to consumers today. For the record: health, home, auto, travel, disability, and generic liability insurances is usually a necessity. What author is saying is don't insure against spilled milk, even if many shops offer these easy add-on "insurances" at checkout. Personally, I sometimes find it hard to know what I should and should buy when renting a vacation home or car. I don't care for the cancellation insurance, but I do want a liability insurance (which most always include automatically, at-least where I live).