Insurance

[TOC: all blog posts]

When I buy an appliance or tool or electronic gizmo, the cashier often asks if I want insurance. I say no. If I've done my homework, I assume that my purchase is reasonably reliable. I may end up with a lemon, and then I'll need to repurchase, provided I still want the thing. But I assume the company offering insurance has done their homework, and so, odds are, I won't need it. I self insure.

With a car, the risk is higher. If I own a car, I'm required to have liability insurance. This makes sense. It would not be feasible for the state to assess each purchaser to determine whether they have (or will have) enough assets to cover the considerable cost for ruining someone else's life with a car, which is rare but happens. Collision and comprehensive insurance are optional. I may accept the same odds as an insurance company and cover repairs or replacement of my car if the need arises. The more valuable the car, the more likely I'll insure it. 

Most of us have home insurance. Mortgage companies require it, for one thing. If the house is fully paid for, we typically still don't want to risk having to replace or renovate a home. Fire, bad weather, or plumbing failures can do more damage than we can afford pay for. Or, maybe we can afford it, but we put our life savings at risk and would rather not. Only the very wealthy can afford not to insure their homes. (Maybe they got rich selling insurance to those of us who can't.)

When it comes to shared properties, insurance decisions are more complex. One owner may have higher, or lower, need for insurance than others. Not all may agree on what needs to be insured or to what level. One investor may be willing to gamble on the odds of never needing insurance. Another investor might be more conservative.

A lot of us, being conservative I suppose, want to insure our greatest shared asset. Others do not.

Climate change threatens catastrophic consequences to this planet we share. Some say the risk is overstated. Some say we should do something about it, even if the risk is low. Others insist we must do nothing; insurance is just too costly.

Especially to them. They have oil to sell.