The Rational Choice to Buy Nothing
We condemn the uninsured as irresponsible. But what if they’re the only ones doing the math correctly?
(I am not involved in the insurance industry in any professional capacity. What follows is written solely from the perspective of a consumer who has purchased and read too many policies.)
The Uninsured Are Right 95% of the Time
Consider this calculation. You spend $90 on travel insurance for a weekend trip. The policy covers trip cancellation, medical emergencies, lost luggage, and flight delays. But look at the actual probabilities. Your chance of needing any of these protections is somewhere between 3% and 5%.
The person who skips the insurance and pockets the $90 makes the mathematically correct choice 95% of the time. They are not reckless. They are not naive. They are simply playing the odds the way casinos do when they set table limits. The house always wins because the house understands probability better than the players.
So why do we call them irresponsible?
Because insurance companies have convinced us that uncertainty itself is the problem, and that paying to make uncertainty go away is the solution. But uncertainty never goes away. You are simply paying someone else to pretend it did.
The industry has a term for people who decline coverage: going naked. The phrase is designed to make you uncomfortable, to suggest vulnerability and exposure. But going naked is not stupid. It is the consumer equivalent of being the house. You accept many small risks instead of one guaranteed loss.
Insurance as a Tax on Anxiety
Insurance is not a product. It is a voluntary tax on your inability to tolerate uncertainty.
The industry does not sell protection. It sells permission to stop worrying. The policy document is secondary. What you are actually purchasing is the ability to tell yourself that you have handled the worst case scenario. You have not handled it. You have paid someone to hold a piece of paper that says they might handle it if a very specific set of conditions is met.
This is not unique to insurance. Extended warranties, identity theft protection, antivirus subscriptions, and roadside assistance memberships all prey on the same cognitive vulnerability. We do not trust our own judgment about risk. We prefer to outsource that judgment to institutions that claim expertise. What they actually have is better marketing.
The premium you pay is not proportional to your risk. It is proportional to your anxiety. Travelers who buy trip insurance are not more likely to have their flights cancelled. They are more likely to lie awake at night thinking about cancelled flights. The insurance industry is not in the business of covering losses. It is in the business of monetizing fear.
The Social Contract of Mutual Delusion
We judge the uninsured harshly. They are irresponsible, short-sighted, selfish. Meanwhile we celebrate the savvy consumer who maximizes coverage, who reads the fine print, who calls their insurance company to add riders and endorsements.
This makes no mathematical sense. But it makes perfect social sense.
Insurance functions as performative responsibility. It is proof that you have considered the worst case scenario. The actual coverage is irrelevant. What matters is that you can produce documentation showing that you tried. When disaster strikes, being insured allows you to say you did everything right, even if the claim gets denied.
The uninsured person cannot make this claim. They chose to accept risk, and when that risk materializes, they have no one to blame but themselves. Society offers no sympathy to people who calculated the odds and lost. We reserve our sympathy for people who paid for protection and still lost. The first is a moral failure. The second is merely bad luck.
This creates a social contract built on mutual delusion. We all pretend the safety net exists. We all know it mostly does not. But being insured gives you permission to stop thinking about it. You have fulfilled your obligation to worry. The rest is someone else’s problem.
Being uninsured violates an unspoken rule. You are supposed to pretend the system works. Opting out reveals that the emperor has no clothes. If enough people start doing the math, the entire structure collapses.
What We Are Really Buying
Insurance does not prevent loss. It provides a narrative of attempted prevention.
This is what we are actually purchasing: liability transfer. Not financial liability, but emotional liability. When something goes wrong, we can point to the insurance company and say we did our part. We bought the policy. We paid the premium. We read the coverage summary. The failure belongs to someone else.
The claim denial is almost beside the point. Having tried to be covered offers psychological cover. The attempt matters more than the outcome. This is why people continue to buy policies even after multiple claim denials. They are not buying payouts. They are buying the ability to say they tried.
This transforms insurance into emotional infrastructure. It does not protect you from financial ruin. It protects you from the accusation that you should have known better. When the medical bill arrives, when the car is totaled, when the house floods, you can produce documentation proving you were responsible. The documentation may be worthless, but it absolves you.
The uninsured person has no such documentation. They accepted risk knowingly. Society treats this as reckless, even when the math supports it. We do not reward people for being right about probability. We reward people for following the script.
The Honest Policy
What if insurance companies were honest about what they sell?
Imagine a policy that separates the peace of mind fee from the actual expected payout value. The premium is $90. The expected payout, based on actuarial tables and historical claim rates, is $4.50. The remaining $85.50 is the cost of not worrying.
Would we still buy it? Probably yes. Because the product is not protection. The product is permission to stop calculating. Most people would gladly pay $85.50 to outsource the mental burden of risk assessment. The deception is not in the pricing. The deception is in pretending the transaction is about coverage when it is actually about comfort.
An honest policy might include these disclosures:
This policy covers your anxiety about unlikely events. This policy does not reliably cover the events themselves. Premium reflects the cost of making you feel responsible. Expected payout is approximately 5% of premium paid. We will deny 80% of claims that are financially advantageous to deny. Sign here to confirm you understand you are buying documentation, not protection.
The remarkable thing is that we might still sign it. Because the value is not in the payout. The value is in the receipt. Proof that we considered the risk, even if we did not actually mitigate it.
The Honest Transaction
Insurance companies are not lying to us. They print every exclusion, define every term, enumerate every condition. The policies are technically transparent. What they exploit is not our ignorance but our psychology. We want to believe protection is possible. They sell us that belief in legally defensible language.
The uninsured are not victims of this system. They are simply the only ones who have done the math and decided the transaction is not worth it. Society punishes them for this clarity. We call them reckless when they are merely rational. We call them irresponsible when they have simply calculated the odds.
Both choices are rational. Being insured buys social approval and psychological comfort. Being uninsured saves money and accepts reality. The difference is that only one side admits what it is buying.
The insurance contract is honest. It says exactly what it does. We are the ones who are dishonest, pretending we do not understand the terms. Maybe the real illusion is not the policy. Maybe the real illusion is our belief that we need someone else to manage uncertainty we were always going to bear ourselves.
— no-one
Thoughts you didn’t think, written for you anyway
If this made something click that was already living in you,
then you’re in the right place.
I’ll keep following the questions most people look away from.
Walk with me if you want.