What are the benefits of having insurance?

Answer 1

Only one. Peace of mind. Insurance is a risk mitigation tool. You transfer your risk to an insurance company in exchange for a premium. So the benefit is if you incur a loss from an insured risk, the insurance company assumes all or part of that loss. You have a few options on how to handle risk as you decide if you want insurance or not. You can accept risk. If I wanted to sell insurance to protect everybody in California against being attacked by a Polar Bear I wound not sell very much. Most people would accept that risk. You can try to lessen your risk. I could choose to take a bus or train rather than drive my car. By reducing the miles I drive in my car I have reduced my risk of being in an accident. You can give all or part of that risk to someone else (insurance). I pay an insurance company to assume some of my risk for medical expenses should anyone in my family get sick. When my daughter was diagnosed with Type 1 Diabetes and we needed to get her a $5000 insulin pump, I wrote a check to the pump company for only $19 because I gave that risk to the insurance company for a monthly premium. I don