Insurance Doesn't Make Sense If You Have Savings |
February 12th, 2011 |
| insurance, money |
Living in an apartment, it might make sense to get renter's
insurance. We'd pay something monthly, and then if something bad
happened the insurance company would pay for our stuff. The
alternative is not to get insurance, and pay for stuff out of
savings if needed. Insurance companies make money. They do this by
charging people as a whole more in premiums than they get back in
payments [1]. So as long as we can afford to re-purchase all our
stuff out of savings, insurance has negative value to us.
[1] Health insurance is different because the company does collective bargaining to decrease how much the providers charge for their services.
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