Why take out insurance?

What it gives you

Certainty about what you cannot bear. With personal injury the loss is calculated over the whole of the victim's life; that runs into hundreds of thousands or millions.

Defence against unfounded claims. If a claim is made against you when you did nothing wrong, your insurer conducts that defence and pays the costs.

Help at the moment itself. An emergency assistance centre after an accident abroad, incident response after a hack: that is often worth more than the payment.

Where the benefit stops

With amounts you can do without any difficulty. Anyone who can easily bear an excess of five hundred euros does not need cover for losses of two hundred.

With foreseeable costs. Maintenance, wear and tear and replacement are not a risk but planning; you do not insure those.

What it is not

Insurance never pays more than the loss. You do not end up better off; you are put back in the position you were in before the event.

The trade-off

Work out what a scenario would cost you and how likely it is. Rare and unaffordable: insure. Regular and affordable: bear it yourself.