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An unintended consequence of insurance

An unfortunate and unintended consequence of insurance (and assurance) is that it transfers wealth away from those who take particularly good care of their insurable interests (for example, taking good care of their health, never leaving the back gate unlocked, driving carefully, etc.) towards those that don't.

Clever underwriting (for example, distinguishing between smokers and non-smokers) and no-claims bonuses attempt to address (and neutralise) this transfer, but these are blunt instruments at best.

As an individual, the best that you can hope to do is to shop around, and look for insurers that ask you the types of questions that enable you to specify the things you do to take care of your insurable interests.

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