The EV of insurance is negative, in the sense that the expected money that one can expect to get out of insurance is less than the premium.
Insurance is for catastrophic losses. I don't pay for insurance to make a profit, I make it to avoid the large tail loss of having the house destroyed and having to pay the value of the mortgage to the bank.
Insurance is for catastrophic losses. I don't pay for insurance to make a profit, I make it to avoid the large tail loss of having the house destroyed and having to pay the value of the mortgage to the bank.