[choeger]

There are certain risks you simply cannot pay out-of-pocket: Car accidents (my car is insured to 20M in damages p.p.), house destruction (you usually already have one mortgage), or inability to work in your profession (e.g., by becoming blind). The former cases are so expensive you cannot expect to save money or take a loan and pay off the damages. The latter case impacts your ability to earn money in the first place.

An insurance company makes money because they don't expect many of these cases to happen at once. But that's not a position you should take.

[blitzar]

Also a pretty big difference between the payout/claim for my phone - capped at the price of a new phone, vs health, chronic condition, pain etc - unlimited.

Or you do what I do and live with the cracked back screen on your phone, because it is under a case anyway.

[echelon]

> my car is insured to 20M in damages p.p.

How much does that policy cost?

Are you hedging against running into a gas pipeline, school bus full of children, or something along those lines?

I'm honestly really curious about this.

[choeger]

This is Germany. I think the 20M is a legal requirement or derived from a legal requirement (by adding something on top).

This car insurance costs me around 40€/month, but there's a steep curve based on how many years you've been free of damages. A new driver would pay around 6 times as much, AFAIK.

The reasoning behind the high damage rate is indeed the risk to it injure a child for life. In that case the insurance will cover lifelong costs.

[MandieD]

Legal requirement for personal automobile liability insurance in Germany is 7.5M EUR for personal injuries and 1.2M for property damage. I was startled when I moved over here from Maryland, where $500k liability limit was the highest available from Geico at the time.

We have an umbrella liability policy for 100M EUR - generally recommended in Germany. Our home insurance is less than 300 EUR/yr. Most expensive insurance we have is long-term disability. However, we do not insure older used cars for anything other than liability, and certainly never insure consumer electronics. If a month’s pay could replace it, or it’s not something that absolutely must be replaced right away, we wing it. Insurance is for risks that we could not cover from savings or that would cause long-term financial hardship, not disappointments.