Betting is taking on some defined risk with probability of payoff. Insurance is offloading part of the risk to the third-party (Insurance underwriter). For ex

Betting is taking on some defined risk with probability of payoff. Insurance is offloading part of the risk to the third-party (Insurance underwriter). For example I can bet on the roulette on the Black. I can also insure(hedge) against Zero by paying insurance premium (1/37 of my bet on Black). that way I bet on Black and have 1:1 odds, and in case of Zero my insurance will pay out 37:1 completely paying back my bet on Black. of course 1/37's of my bet will be gone most of the time and this is exactly the house edge in roulette. in real-life you probably don't want to bet most of the times, but in some obscure low probability scenarios - you would want to offload that low probability event to insurance. main difference is you expect insurance to pay out rarely, but in betting you expect to payout more regularly.