My thoughts exactly. Any complete risk analysis factors in what lies on the "other side" of the event you're insuring against. Not to mention, the value of some

My thoughts exactly. Any complete risk analysis factors in what lies on the "other side" of the event you're insuring against. Not to mention, the value of something is relative. An example: Let's say you need a car to commute 30 miles to work (no public transit available). You have a monthly surplus income in the amount of $700 -- provided you keep your job, which means you have to show up every day. You drive a modest, but reliable, used car that cost you $8,400 to purchase. If the car were a complete loss in an accident, it would take you 12 months of surplus income to purchase a replacement. However, if the car is suddenly unavailable to you, getting to work reliably becomes an issue. Opportunity cost! In this case, it makes sense to use a portion of your surplus income to insure the car. The same might be true of someone who relies on a lawn mower for work. A better example might be a laptop like a MacBook Pro. I use a nicely equipped MacBook Pro that cost me around $2,700 to purchase. When I was just getting started as a freelancer, I bought a 100% replacement warranty from SquareTrade.com for a couple hundred dollars because I only had enough money to buy the laptop one time. Now that I can afford to replace the laptop any time, I take the risk myself and keep the $250.