With the collapse of all these big financial institutions lately, i've been thinking - what would life be like without "insurance". We've got house insurance, contents insurance, car insurance, life insurance, health insurance - the list goes on... we pay a premium, so that if shit happens, someone else can bail us out.
But what if insurances didn't exist - how would our behaviour change? We probably wouldn't sink so much of our hard earned into big expensive possessions. We wouldn't borrow heavily, wouldn't go into debt, wouldn't spend what we didn't have, incase shit did happen, and you lost those possessions or damaged them, and then had to spend the rest of your days paying off something that was no longer worth anything.
Little wonder governments are prepared to throw any amount of money neccessary to bail out failing insurance giants - the alternative to a world without insurance would be catastrophic for economists - imagine, people only spending what they had, on the modest neccesities of life... unimaginable.
