Can you insure your bank account? i.e have all your money recompensated by the insurance company incase of bank failure.
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So most of answers have been about government guarantee schemes, but these aren’t what most people would classify under insurance and are not designed to actually pay out, but mainly to avoid bankruns.
u/Mont-ka already said that you can probably find someone to take an bet and insure you, but this is also not what insurance is. The answer is no. For this we have to look how insurance works.
So how insurance works (from the insurers side) is by pooling risks together to obtain an relatively riskless portfolio. For example, they insure 1000 people for an 1000 euros and the chance of someone not getting their money back is 1/1000. Now, under these assumptions we would expect the insurer to have to pay out ~1000 euros on average, sure one year it might be 1050 or 950, but the portfolio (of insured people) is relatively riskless.
But this is not how it would work. The chance of the bank having a failure is 1/1000. For clarity let’s assume all 1000 people are with the same bank. Now the insurer has to pay out 0 in 999/1000 of the cases, and 1 million is 1/1000 of the cases. So, the portfolio is not riskless. Rather is the exact same risk. This bassically means that it is uninsurable.
So, in practice it is a bit harder, since we have multiple banks, but the argumentation is exactly the same, with the addition that if one bank fails, the likilihood of another bank failing is increased.
So no, you can’t insure that risk. So in that case, the government can step in and indeed almost all governments have done so.
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