Exactly. Insurance is best thought of as similar to gambling, but functionally the opposite. It’s “I’m giving you $x per month knowing that I’m probably going to lose money on this exchange, but in return if I’m hit with y disaster that it would be very difficult to financially recover from then you pay for it”.
I get that some people are frustrated by it during financial squeezes, and with liability insurance it can be annoying as it’s mandatory. But as someone who’s gotten a renter’s insurance payout, the relief of “thank fuck I’m not out thousands of dollars while having to deal with this disaster” is immense
That’s exactly how it started! People would go to a major bookmaker like Lloyd’s coffee shop and place a bet against themselves. So you would bet that your ship would sink or your house would burn down or that you would suffer a crop failure. Then if the bad thing happened you would win the bet.
Of course, if the odds are close the bet would be very expensive, so you’d have to do monthly financing. But what if the catastrophic event happens before the bet is fully paid?
Somebody had the genius idea to pool everybody’s bet and run the odds.
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Exactly. Insurance is best thought of as similar to gambling, but functionally the opposite. It’s “I’m giving you $x per month knowing that I’m probably going to lose money on this exchange, but in return if I’m hit with y disaster that it would be very difficult to financially recover from then you pay for it”.
I get that some people are frustrated by it during financial squeezes, and with liability insurance it can be annoying as it’s mandatory. But as someone who’s gotten a renter’s insurance payout, the relief of “thank fuck I’m not out thousands of dollars while having to deal with this disaster” is immense
That’s exactly how it started! People would go to a major bookmaker like Lloyd’s coffee shop and place a bet against themselves. So you would bet that your ship would sink or your house would burn down or that you would suffer a crop failure. Then if the bad thing happened you would win the bet.
Of course, if the odds are close the bet would be very expensive, so you’d have to do monthly financing. But what if the catastrophic event happens before the bet is fully paid?
Somebody had the genius idea to pool everybody’s bet and run the odds.