5 ms·

Perhaps I am just lucky but I out of principle never buy any insurance if it is not required by law. If something breaks I either try to fix it myself or buy a

by jeena 12y ago

Perhaps I am just lucky but I out of principle never buy any insurance if it is not required by law. If something breaks I either try to fix it myself or buy a new one. I never calculated it but I don't feel that I miss out or pay more in the long run. Quite the opposite, I have almost no running expenses and can invest the money others pay the insurence companies into new stuff. The only exception of that rule are insurances which cover stuff I might accidentally do to other people.

xur17 12y ago
I use a similar approach. The insurance companies are in business to make money, so (on average) they don't sell policies that lose them money. I buy insurance if either: 1. I believe I'm significantly more likely to break the item then their estimates (ex: you use your phone at your construction job, and are significantly more likely to break it). 2. It's enough money that it would cause significant problems for me (home insurance, renters insurance, etc). Otherwise, I figure I am 'self-insuring', and will come out ahead over the long term.
- somerandomness 12y ago
  > The insurance companies are in business to make money, so (on average) they don't sell policies that lose them money. Not necessarily. Insurance companies on average lose money from policies and make it up by investing the float. Think of the money they lose on policies as the "interest" that you get paid for lending them your premiums.
grecy 12y ago
> Perhaps I am just lucky but I out of principle never buy any insurance if it is not required by law. If something breaks I either try to fix it myself or buy a new one. Insurance companies know the odds better than us, they set the premiums, and they still manage to make a profit every year (billions of dollars in lots of cases) It glaringly obvious that "on average" the average person should not get insurance when not required, because otherwise you're just paying for the profit of said insurance company.
- angry_octet 12y ago
  No one is the average person. Even average people are not likely to be the average insured person. So it depends how much and in what direction you deviate from the mean. For example, I kill cell phones regularly from dropping them; for me, insurance might be more cost effective; for the people who keep cell phones turned off except for emergencies it probably isn't good value. But, anecdotally I would say that these are the very people who have insurance. They are buying 'peace of mind', a very expensive product created by Madison Avenue.

by jeena 12y ago

xur17 12y ago

I use a similar approach. The insurance companies are in business to make money, so (on average) they don't sell policies that lose them money. I buy insurance if either: 1. I believe I'm significantly more likely to break the item then their estimates (ex: you use your phone at your construction job, and are significantly more likely to break it). 2. It's enough money that it would cause significant problems for me (home insurance, renters insurance, etc). Otherwise, I figure I am 'self-insuring', and will come out ahead over the long term.

somerandomness 12y ago
> The insurance companies are in business to make money, so (on average) they don't sell policies that lose them money. Not necessarily. Insurance companies on average lose money from policies and make it up by investing the float. Think of the money they lose on policies as the "interest" that you get paid for lending them your premiums.

grecy 12y ago

> Perhaps I am just lucky but I out of principle never buy any insurance if it is not required by law. If something breaks I either try to fix it myself or buy a new one. Insurance companies know the odds better than us, they set the premiums, and they still manage to make a profit every year (billions of dollars in lots of cases) It glaringly obvious that "on average" the average person should not get insurance when not required, because otherwise you're just paying for the profit of said insurance company.

angry_octet 12y ago
No one is the average person. Even average people are not likely to be the average insured person. So it depends how much and in what direction you deviate from the mean. For example, I kill cell phones regularly from dropping them; for me, insurance might be more cost effective; for the people who keep cell phones turned off except for emergencies it probably isn't good value. But, anecdotally I would say that these are the very people who have insurance. They are buying 'peace of mind', a very expensive product created by Madison Avenue.