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Kaj_Sotala comments on Open thread, July 28 - August 3, 2014 - Less Wrong Discussion
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Anytime you're thinking about buying insurance, double check whether it actually makes more sense to self-insure. It may be better to put all the money you would otherwise put into insurance in "rainy day fund" rather than buying ten different types of insurance.
In general, if you can financially survive the bad thing, then buying insurance isn't a good idea. This is why it almost never makes sense to insure a $1000 computer or get the "extended warranty." Just save all the money you would spend on extended warranties on your devices, and if it breaks pay out of pocket to repair or get a new one.
This is a harshly rational view, so I certainly appreciate that some people get "peace of mind" from having insurance, which can have a real value.
Though note that an insurance may regardless be useful if you have self-control problems with regard to money. If you've paid your yearly insurance payment, the money is spent and will protect you for the rest of the year. If you instead put the money in a rainy day fund, there may be a constant temptation to dip into that fund even for things that aren't actual emergencies.
Of course, that money being permanently spent and not being available for other purposes does have its downsides, too.
Agreed on all points.