Quote:
Originally Posted by Dadhawk
Extended warranties are basically an over/under bet, and the house almost always wins. @ extrashaky, I'm glad the gamble worked "to your benefit" this time. |
Insurance is not gambling. It's risk mitigation. You exchange a risk of unknown impact and replace it with a known cost that you can account for.
Gambling is actually the opposite. Gambling involves taking on an unnecessary risk of loss in the hope of a larger return. I didn't take on any risk when I purchased the warranty. I paid Subaru to accept that risk on my behalf. I don't actually gain anything if it pays out. I didn't just "win" $5000. The warranty erased the negative effect of a $5000 loss.
Seems to me the real gamblers are those of you who are risking that the car won't break down and have no idea what this car is ultimately going to cost you to keep it on the road.
Full disclosure: I'm a CPA with a degree in finance and a background in risk mitigation, now working in the insurance industry. And because I have a pretty good idea how risk works, I don't gamble. I don't even buy lottery tickets.