Comment by chii

> So I could decide that I think your house is likely to burn down, so I buy insurance on it.

which makes the insurance premium grow higher, reflecting the information that such a house has a high risk of burning down.

It doesn't matter that the buyer of the insurance has no material connection to the house. I can't see why such "gambling" shouldn't be allowed to happen, provided that there's enough regulation and monitoring so that you cannot then go and burn down someone's house to collect the insurance!