> Another place is where you really just don’t care about the marginal extra cost for the peace of mind you get
Of course, there’s no peace of mind unless you think the insurance is likely to be a better deal for you than just saving the premiums yourself, right?
Peace of mind is about no longer fearing. If my phone were insured, I would dare walk around with it outside of a case. That would give me peace of mind.
Insurance makes people less worried. Both because of financial risk, aswell as some insurance companies also handling the fallout.
Besides that, insurance is paying for risk reduction. Lower risk, in and off itself, gives peace of mind. Not everyone has the same risk tolerance.
This was an important consideration in deciding to purchase pet insurance for my British Shorthair. As far as insurance goes it probably falls under the category of "not necessary." I added up the cost of the premiums over my cat's lifetime and realized I would probably break even at best. But in this one instance the peace of mind is worth it.
For everything else I almost never purchase insurance because I know I will get out ahead. I especially am always surprised that people buy the $20 travel insurance airlines sell at checkout. But for someone who flies once or twice a year, maybe the peace of mind is worth it.
People often purchases based on emotion and insurance is no different.
Of course, there’s no peace of mind unless you think the insurance is likely to be a better deal for you than just saving the premiums yourself, right?