this post was submitted on 02 Dec 2024
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[–] agamemnonymous@sh.itjust.works 1 points 3 weeks ago

Firstly, insurance isn't a derivative, so it's not really relevant here.

Secondly, paying insurance is still a form of financial risk. If you pay insurance for the entire time you own a home, but never file a claim, then that's basically just money wasted. You're trading material risk to your home for financial risk.

And it's also basically a gamble. You're betting that the total you pay in premiums will be less than whatever the insurance company will pay you. The insurance company is betting that it'll be higher.