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Insurance is stupid if you are wealthy enough to cover the damages on your own. Insurance for your phone, computer etc for example is certainly stupid for most
by andoando 2y ago
Insurance is stupid if you are wealthy enough to cover the damages on your own.
Insurance for your phone, computer etc for example is certainly stupid for most people.
- ghaff 2y agoGenerally speaking. I (rarely) buy insurance for things like travel when I have reason to think that I have circumstances that may lead to a higher probability of collecting insurance than the average person automatically buying it has. And I certainly have things like homeowner's insurance where losses could be catastrophic. But self-insuring for random relatively low-cost events mostly makes little sense for people as it does for companies.
- sailfast 2y agoBeing wealthy enough to cover it yourself doesn't mean it's stupid to buy the option to avoid the downside if it's priced properly.
- andoando 2y agoInsurance companies are always going to give you unfavorable odds, unless you think for some reason youre more likely than average to have an accident. I don't understand why car/home insurance isnt nationalized
- cmrdporcupine 2y agoCar insurance is nationalized in a few Canadian provinces. https://en.wikipedia.org/wiki/Public_auto_insurance https://en.wikipedia.org/wiki/Public_auto_insurance
- 4death4 2y agoReducing variance in a random outcome still has value. For instance, you might have the money to cover an adverse outcome, but if you could guarantee you wouldn't need the money, then you could park it in an illiquid asset (e.g. some type of investment).
- martinflack 2y agoMany types of insurance that protect payouts to third parties include provisions that the insurer handles the lawsuit to defend the claim. This can be a convenience even to a wealthy person, especially one who doesn't get sued much.
- deleted 2y ago[deleted]