If you’re in a car accident that’s likely covered by another policy. But this is what keeps insurance companies in business and allows agents to garner upper class lifestyles. Some of the richest guys I know are insurance brokers.

You and I are going to open an insurance agency. We need to pay for infrastructure, salaries, losses, then make a profit. It’s the same business model as a gym: you want people to pay and not use the product (if everyone with a membership to LA fitness showed up at the same time they couldn’t get in the door.) So statistically, the payouts have to be far less than what we take it.

The insurance model runs on short-term fear. What if you get a nail in your tire and it needs to be replaced (yeah, what if since 99% of tires can be patched). But it’s only $10 more....

All I was after here was the metric - call it ROI - of what I would get back to what I paid in given other insurance, cash on hand, and the unlikely possibility of being in a horrific slip and fall at Walmart (oh wait, in that case I’ll sue.)

You don’t pay insurance rates of 10% of value on your house - likely the most valuable asset you have - but yet, there’s a willingness to pay premiums of 10% or more everywhere else. Store tried to sell me a $129 plan on a $900 sofa. Does it replace it if my dog eats it? No? Well that’s the more common scenario in my house, not the “my friend got ink on it.”

This is a no win argument. It falls into two camps - those over insured that buy everything and those that refrain. Ultimately it’s chance that decides who wins.

Ever read the disclaimer when renting a car at Enterprise...” This is to inform you that the purchase of additional insurance may be identical to what you already have and may be unnecessary...”