Why do people pay for insurance? If they have the money to ensure protection in the case of damage or loss that isn’t guaranteed, why not save the money for when something actually happens?

Question

Why do people pay for insurance? If they have the money to ensure protection in the case of damage or loss that isn’t guaranteed, why not save the money for when something actually happens?

In: 0

Answer 1

You don’t actually know the full extent of losses. Forexampke travel insurance often includes $500,000 in medivac as medical evacuation can run into the $100’s of thousands.