Economists agree about the right way to think about insurance. The most important principle is to get protection against rare but significant mishaps that can lead to financial ruin. The sorts of risks that should be insured are homes being destroyed by floods or fires, major health problems, the death or disability of a family income earner, and the crash of the family car (if it is still worth anything). Any of these events can put a household in debt for years, or even lead to bankruptcy. Paying a company to share those risks makes good sense. We should not be insuring against the
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