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Insurance is primarily for major events. The things at the extreme upper end of the bell curve. For example, you've hit another car (possibly an expensive one)
by tjohns 2y ago
Insurance is primarily for major events. The things at the extreme upper end of the bell curve.
For example, you've hit another car (possibly an expensive one) and caused tens of thousands of dollars in damage. Or you've inured a passenger and caused hundreds of thousands of dollars of hospital bills.
The kinds of events that would financially ruin you, or at least seriously set you back on your life goals. Or, in the case of state-mandated insurance, where there's a high likelihood you wouldn't be able to make the other party whole.
You can use it on smaller things if you insist (and your rates will go up), but that's not really what it's for.
Personally, both the events you described fall under my definition of one-off maintenance ("things that are an unpredictable yet unavoidable cost of owning a vehicle") and that I'd expect to pay for out of pocket.
- mpreda 2y ago> Insurance is primarily for major events. The things at the extreme upper end of the bell curve That's how it should be, but isn't because all insurance contracts cap the maximum insured amount. So that's absolutely NOT the "extreme upper end of the bell", not at all.
- Mathnerd314 2y agoThere are unlimited umbrella policies, but practically past 1 million or <net worth> it is probably cheaper to declare bankruptcy than pay the additional premiums.
- e_y_ 2y agoWouldn't you rather not lose $1+ million? It costs something like $400/year per $1M coverage which is hardly breaking the bank.
- Mathnerd314 2y ago$400/year is a new laptop or something, if you spend the money then the creditors can't take it.
- efitz 2y agoAnd that is one of the reasons why medical insurance is so crazy in the United States nowadays - it’s no longer used to hedge catastrophic unpredictable events (which used to be called “major medical”), but instead is used to pay for normal, minor consumption or for chronic conditions. In other words it’s no longer like a bet, it’s like a discount plan. But the problem is that the complexity of introducing a third party payer who doesn’t want to pay, and a consumer who has no incentive to self regulate consumption, means that the costs spiral up and up.
- scott_w 2y ago> But the problem is that the complexity of introducing a third party payer who doesn’t want to pay, and a consumer who has no incentive to self regulate consumption, means that the costs spiral up and up. The first part is correct but a consumer that “doesn't self regulate consumption” is not a thing in medicine. People don’t take drugs for fun. People don’t injure themselves more in public healthcare systems. In fact, a huge problem in medicine is getting men to go to the doctor before issues become critical (and more expensive).
- mcculley 2y agoPeople eating more than they should, getting diabetes, and then consuming more medical services is a form of poor regulation of consumption. The overapplication of OxyContin is another form of unregulated consumption. Now we have the semaglutides and will see the same effect.
- scott_w 2y agoThe USA has a 38% obesity rate vs the UK at 29% (for men). Given both exist quite far apart on the public/private healthcare debate, I don’t see how this supports your argument at all. Source: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7670332/ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7670332/ I’m not going to debate the others because I don’t know much about them and, since your argument fell apart at light prodding, I don’t think you do, either.