The premise of insurance is that you pay more on average over time but remove very expensive tail events. Basically you pay the insurance company to reduce your

The premise of insurance is that you pay more on average over time but remove very expensive tail events. Basically you pay the insurance company to reduce your risk. If you are wealthy enough (and mentally prepared) to absorb tail events without much negative effect on your life, it can be perfectly rational to not insure damage to your car.