It is true, though, that many people fall into the trap of over-insuring. For example, people who could easily afford to replace their car yet pay for comprehensive insurance.
For risks you can self-insure against, you should do so. Otherwise you're just gambling against actuaries, and they're better at the game than you.
For catastrophic events, insurance is a completely sensible bargain for both parties.
Catastrophic event; reminds me of black swans. The more catastrophic, the rarer, but also well be the one with the most damage. As every insurance is itself insured, I'd say if there is something really catastrophic, all crashes and no-one gets money at all.
Financial insurance also build a corset to let the card castel grow higher, until it falls apart on the floor. Idea taken from Antifragile.
It is true, though, that many people fall into the trap of over-insuring. For example, people who could easily afford to replace their car yet pay for comprehensive insurance.
For risks you can self-insure against, you should do so. Otherwise you're just gambling against actuaries, and they're better at the game than you.
For catastrophic events, insurance is a completely sensible bargain for both parties.