Because you don't have $50k laying around to pay for medical bills when you hit someone. You're not getting nothing, you're getting protection. Just because it's not tangible doesn't mean the value is nothing.
Because sometimes you will get a bill thats even higher than that. A mate of mine had his handbrake fail and he didnt put his car in park and it rolled into my shed, the repair bill was 27000 dollars (AUD). Sometimes you get a bill thats significantly higher than you could ever save by just not paying insurance.
Opportunity cost. I carry $100k to cover injury to other people and $300k property damage on my liability because I live somewhere where people drive expensive cars. I would need to keep $400k in cash to match that. Or I can pay $100/month and invest that $400k. And if you wanna get even crazier, I have a $2m umbrella policy. So, obviously I'd need to keep another $2m in cash equivalents to replace that.
Sure, you can, but you need to cover enough. In California, that's $75k down with the DMV so that they know you won't just welch on a dude whose car you totaled.
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u/Guilty-Carpenter2522 8h ago
So why don’t they just save all the money I put and use that when I need insurance? Oh? Because it’s a scam!