On the contrary, I think using expected value to explain the value of insurance from the perspective of an insurance holder is a misunderstanding of insurance. People don't buy insurance to optimize the average case; they buy it to optimize the worst case. But an insurance policy that doesn't redistribute wealth has both negative expected value and negative value in the event of a payout. At which point it is just a personal rainy-day fund held in a savings account with a negative interest rate.
Insurance almost mathematically must be negative EV in dollar terms. It's positive EV in utility terms because of the declining marginal utility of a dollar. If it was dollarwise positive EV, every insurer would be insolvent.
This is pretty basic? Like, it's an economics frequently asked question why buying an insurance policy isn't as irrational as playing the lottery, since both have negative dollar EV.
You're moving away from the original question, which is does insurance redistribute wealth. If you get an insurance payout and that payout doesn't involve redistribution of wealth, then it means that the payout must come only from your premium payments, minus admin fees and profit margin. But that's not how insurance works. There are innumerable examples of people who received more in insurance payouts then they've ever paid in in premiums.
