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.

Overreact

Our response to this virus thing is overblown. We shouldn't panic the way we are. Things are better than they seem. So I've heard folks say.

They are right, I hope.

Some other overreactions:

• Home insurance: chances are very low that my house will burn down. But every year I pay an insurance company to promise to help me out if it does. Annoying.
• Car insurance: there are laws requiring me to pay someone to guarantee that if I run someone over, there will be funds to reimburse that someone (or, worst case, their family). 
• Seat belts: I've never been in an accident serious enough to need a seat belt. But I continue to wear one despite the minor inconvenience.
• Bike helmets: I've never needed one of these either (partly because I was lucky as a kid). But see if my wife agrees that I should go without one.
• Health insurance: Annoying. Well, you get the picture.

Social distancing is a sort of insurance policy. It's inconvenient. It's less fun than hanging out with friends when we like. It apparently will disrupt our economy in a big way, if the stock market is any indication. So it may be quite expensive insurance. Like normal health insurance.

But imagine you are the health provider who has to decide which of three patients gets the one available ventilator, as some doctors in Italy have had to do. One or both of the unlucky ones die. Then the one you did give the ventilator to also dies. You made the wrong choice.

When you inform the families of the deaths, you tell them there will be no funerals. They should grieve at home, alone.

You could handle that, no problem?

OK, then I suspect you aren't much of a people person. Not getting out shouldn't bother you. Stay home and quit whining.

And if, in the end, we conclude that we overreacted, that's the best result. So, please, overreact!