Why insurance exists
Observation
Insurance pools rare, large, unpredictable losses. A growing share of products now covers small, frequent, predictable costs — which is prepayment with overhead, not risk transfer.
Narrative
More insurance means more protection.
Alternative View
Coverage of predictable expenses converts a risk-pooling mechanism into an administrative layer that inflates the cost of the underlying service.
Unknowns
What fraction of premiums covers genuinely unpredictable events? How does administrative load scale with claim frequency? What would direct pricing of routine services look like?
Question
Which of your policies covers a risk, and which covers a certainty?
Why It Matters
Confusing prepayment with protection hides costs and removes price signals from entire sectors.