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?

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Answer 1

>ELI5: 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?

Insurance protects you precisely from damages you *couldn’t* possibly afford to pay.
When you buy insurance, you – in essence -buy **immunity from bankruptcy** (due to legal fees/liability payments/medical bills/<insert insurance type here>/etc. …).