Mike highlights one of the biggest problems with insurance in post #38 which is that we as consumers have lost sight of what it should be for!
The earliest forms of insurance were to cover catastrophic loss, such as a ship and its cargo being lost at sea. Individual ship owners could not cope with the financial impact of such calamities so they created a pool of money from which those who suffered losses would be compensated. Building property insurance evolved from this, but the perils covered were limited to risks such as fire where the consequence was again usually a total, catastrophic loss.
However over time insurance has expanded to cover a whole range of risks which, if they were too occur, would not really cause a life changing loss to the owner, such as accidental damage to a TV set on a contents policy or adding cover for personal possessions to a motor policy. Insurers would argue that these are giving better cover but of course what they are really trying to do is generate additional income.
The results is that insurance is generally far more expensive than it needs to be because it now includes cover for minor events which do not really impact the livelihood of the owner at risk but which do cost insurers a lot because of the disproportionately high operational cost of servicing small claims.
This same problem can be seen in aviation insurance where a lot of ‘free’ covers are included which in truth the aircraft owner still pays for within their premium whether they want it or not. In addition owners are not encouraged to pay high excesses because that would reduce premiums and hence the commission paid to brokers. Aircraft owners should be allowed to choose stripped down hull or liability cover if they want, to add optional covers (e.g. spares, PA etc) only if they feel they need them, and to select higher excess levels in return for premium discounts.
Rant over
