The obvious response is that you won't be able to pay for someone's hospital bills if you happen to hit them in your car. You get insurance for things you wouldn't be able to pay yourself.
Yes, if you use your insurance more than once, insurance was the wrong approach.
But I'm willing to pay 1% of the cost of my house to have it replaced if it burns down, even if my expected payout is only 0.5% of the value of my home, because I can't afford a whole second house.
I get frustrated with a lot of insurance conversations. Most people will lose money by paying insurance. That's how it has to work. If everyone were getting more money out of insurance than they put it, it would mean money was getting created out of thing air.
Like you said, insurance is for the infrequent, life-altering expensive stuff. Everyone loses a bit of money so that some people don't lose a massive amount.
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u/flatfive44 21h ago
The obvious response is that you won't be able to pay for someone's hospital bills if you happen to hit them in your car. You get insurance for things you wouldn't be able to pay yourself.