Comment by avianlyric

How is this even close to insurance? When you buy insurance you buy protection from risk, that risk exists regardless of if a bad thing actually happens or not, and you’re still protected even if nothing happens. There’s no economic loss there because you’re getting the product you paid for (insurance coverage, and a substantial reduction of risk), you claiming on that insurance is irrelevant.

A better comparison would be going on holiday, pre-paying for £100,000 of medical treatment at a hospital, and then never going to hospital. Then there’s clearly an economic loss, you’ve paid £100,000 of your real cash, and got no nothing in return. You haven’t even got protection from risk, because the hospital isn’t gonna help you if your luggage goes missing, but travel insurance obviously will.