What does Insurance Ensure?

We call this kind of fish feed (BOTH colors)...
Pic shot from predator POV.

 

INSURANCE, n. An ingenious modern game of chance in which the player is permitted to enjoy the comfortable conviction that he is beating the man who keeps the table.

 From The Devil's Dictionary by Ambrose Bierce

The following dialog is from the same source. I've edited it to apply to boats, and updated terms and a few of the more prolix phraseologies:

INSURANCE AGENT: Captain, that's a fine vessel-- let me help you insure it.

BOAT OWNER: With pleasure. Please make the annual premium so low that by the time when, according to your actuarial tables, it will probably be lost to misadventure, I will have paid you considerably less than the amount for which I am insured.

AGENT: Hold on, Friend; we could not afford to do that. We must adjust the premium so that you will have paid more.

BOAT OWNER: How, then, can I afford that?

AGENT: Why, your boat may sink at any time. There was the TITANIC, for example, which --

BOAT OWNER: Spare me. There were the ALMA, on the contrary, and CURLEW, and SERAFFYN, which --

AGENT: Spare me!

BOAT OWNER: Let us understand each other... You want me to pay you money on the supposition that something will occur prior to the time set by yourself for its occurrence. In other words, you expect me to bet that my boat will not last so long as you say that it will probably last.

AGENT: But if your vessel is lost without insurance it will be a total loss.

BOAT OWNER: Excuse me, but by your own actuary's tables I shall probably have saved, when it is lost, all the premiums I would otherwise have paid to you -- amounting to more than the face of the policy they would have bought.

But suppose it to sink, uninsured, before the time upon which your figures are based. If I could not afford that, how could you if it were insured?

AGENT: Oh, we should recoup our losses from our luckier ventures with other clients. Virtually, they pay your loss.

BOAT OWNER: And virtually, then, don't I help to pay their losses? Are not their boats as likely as mine to be lost before they have paid you as much as you must pay them?

The case stands this way: you expect to take more money from your clients than you pay to them, do you not?

AGENT: Certainly; if we did not --

BOAT OWNER: If you did not, I would not trust you with my money.

Very well then. If it is certain - with reference to the whole body of your clients - that they lose money on you, it is probable - with reference to any one of them - that he will. It is these individual probabilities that make the aggregate certainty.

AGENT: I will not deny it -- but look at the figures in this broch--

BOAT OWNER: Forget it!

AGENT: You spoke of saving the premiums which you would otherwise pay to me. Will you not be more likely to squander them? We offer you an incentive to thrift.

BOAT OWNER: The willingness of A to take care of B's money is not unique to insurance, but as a charitable institution you deserve applause... CLAP. CLAP. CLAP.

*****

Insurance is an Odd Duck, whether it's for the boat, health, social security (not a hand-out, BTW), life or so on. The best outcome, for both insurers and the insured, is that none receive the services purchased.

In our modern, byzantine environment of bean-counters and hired legal thugs, this can take a twisted turn. The claims of the insured, as individual customers, are easily dismissed or eroded on papery pretexts. Despite an assortment of warmly smiling members of the upper crust,  perky albino goth girls, cavemen and talking animals appearing in their ads, Insurance is a ruthless corporate machine, dedicated to extract as much of your money as possible in return for as little as possible. Someone's got to pay for the chrome on their skyscraping headquarters and shareholder profits.

To be uninsured requires some hard decisions in cost/benefit analysis.

What are the likely risks? How much can preventative care and self-help offset costs? I can't fill my own tooth cavities (or anyone else's), but I can brush and floss. I can't perform an apendectomy, but I can set a broken bone. I can't perform open heart surgury, but I can eat sensibly and manage stress. I can't live indefinitely, but I can accept 'death by natural causes' when my time comes, without heroic measures merely prolonging the inevitable. Until recent years, this was the not so terrible case for all.

[ Heal the wound and cure the illness, but let the dying spirit go. Wisdom from A Wizard of Earthsea by Ursula K. Le Guin... a kid's book, for crying out loud!]

Somewhere along that spectrum is a point where one's pocket fails. Can we accept the consequences?

As sailors, we accept and manage risk with every league under the keel. We gear up and train ourselves to deal with emergencies, because we have left the nest. Our insurance is on board. We accept the risk of damage or even loss of life and property should our resources fail. A later settlement avails us not. Day late, a dollar short.

How much further a step is it to carry this into our lives entire? How much of our one precious life, of which money is a mere byproduct, are we willing to spend insuring what remains? The obsessive pursuit of security can squander what we hope to ensure.

Life.




PS. Of late, there's been a widespread tendency to tar the uninsured as a swarm of leeches. It is accepted as if true that the insured are somehow supporting the uninsured.

Of course, we who are neither insured nor on public aid (a separate issue) eat our losses, and pay full price for required services, out-of-pocket. We are the clients of the service providers we engage.

If you are insured, you are your insurer's client, and they engage service providers. And they have market clout. Insurance companies negotiate with service providers for lowered prices. Sweetheart deals (aka, economies of scale). Guess who pays for those savings...

Who is supporting whom?