/sci/ - Science & Math

>>12579001
Both are jewish scams.

>>12579001
yes, duh. depends on the numbers, which we have none of here.

A person averages 3-4 vehicle accidents in a life time. Not to mention all the weird shit like rocks hitting windshields and stuff. I've used car insurance many times (not at fault) and it has paid for itself many times over. Driving is probably the stupidest thing humans do.

>>12579001
You are a smart one you figured it out. You just need the data and that’s very hard in many instances.

>>12579081
I'm wishing for a future where it becomes obsolete

>>12579027
>>12579117
Regardless of the numbers. Even negative expected value lotteries can be worth purchasing.

>>12579021
based

>>12579001
>what is downside risk

>>12579001
Win lottery: diminishing returns
Lose the no-insurance game: miss out on priceless safety all to save a bit of money

>>12579456
Large fluctuations in money matter more than small fluctuations. Thus, insurance and the lottery are valid tools; one to sacrifice small consistent amounts to protect against potential large losses, one to sacrifice small consistent amounts for the chance at large gains.

>>12579001
Sure. Nominal monetary value doesn't scale 1:1 with marginal utility. Maybe losing 2.5$ a month is so negligible that the the 1 to 300.000.000 odds of being filthy rich is worth the while to you. I personally prefer to keep the 2.5$.

>>12579081
Still, the average person will pay more into car insurance that she would have to pay for car damages were she uninsured. Otherwise there would be no profit margin on an insurance business. So the difference is degree, you are losing more money on average with both insurance and lottery; where each person draws the cut-off point is always somewhat arbitrary.

>>12579243
Never claimed something different. It’s a question of many factors. Even in the naive portfolio models it definitely can be.

>>12580472
>Still, the average person will pay more into car insurance that she would have to pay for car damages were she uninsured. >Otherwise there would be no profit margin on an insurance business.
>So the difference is degree, you are losing more money on average with both insurance and lottery; where each person draws the cut-off point is always somewhat arbitrary.
Not him.
But they don’t do it as a hedge to make money, but as a hedge to ensure liquidity. If you end up without a car, but need one to make money it’s pretty bad, if you can’t afford one. Obviously, if you can easily get a loan in that case it’s something different, but you need to factor it in. In some cases insuring something can be good and in some buying a lottery ticked can be, but it depends.

>>12579001
>>12579243
>>12580472
Car insurance does not have a large negative expected value because most of the money they earn is actually invested to yield around a 2% return. Therefore the profit insurers make is not from taking a % of your premium but from their ROI

>>12580652
Forgot to add that it might change in the future if interest rates remain at 0 as they will not able to earn a safe return