The Point of Insurance

There's something of a confusion over the meaning of "insurance" in the US these days. There's a call fo complete health insurance cover (something I certainly support) but then people say that it should cover the costs of doctors visits, of vaccinations and the like. But that«s not insurance, that's assurance: payment for costs you know will arise.

Insurance is protection against unexpected costs: in terms of health insurance, cancer, or the effects of a bad accident. Like, for example, car insurance. That doesn't cover the costs of your gas, or tires, or oil changes: it covers the costs if you have an accident. Similarly, house insurance doesn't cover the cost of painting the house, of reparing the roof tiles. It's covers the cost of reparing the damage from a fire, or a storm, yes, but that's not certain to happen. That's why it's actually called insurance instead of assurance.

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