Insurance - the great and profitable fear based idea. How do you argue with "what if?" You can sell almost anything with fear, and what a great deal for the insurance companies - they never lose! If they start making less they raise prices.

This fear based selling is simple, and we buy it all the time. Warranties, extended warranties, medical insurance, health insurance, auto insurance, home insurance, flood, fire, death and disability. As a concept insurance is a way to spread risk out over a community.

As an example - consider fire insurance in a small village. If all villagers would put away a little of their money each year in a group fund, when one farmer's house burnt down, the fund will build a new house. In any year, it is easier to take if we spread the price of that house over many rather than one. This could also be done by taxation, but we somehow have elected to do it by insurance companies.

This wouldn't piss me off so much if the insurance funds could be run by one institution who took a minimum amount just necessary to manage the fund - but in fact, insurance companies are rich, so rich they invest in everything and get richer and become power brokers and political structures of their own.
How did they do this? By selling the idea of risk reduction across large groups, but really they take large amounts of money in excess and then become banks, loaning your cash back to you just like a bank, and taking your money yet again.
IN a way they are a fiscal cancer, just like taxes. They don't get smaller, they get larger until the choke the body politic. The excesses of insurance companies is only controlled by their desire not to create an impossible revolt of insurance buyer.

Disgusting business as it stands. That doesn't mean I don't think there shouldn't be a way to rebuild that burned out house- I do think there is some advantage in spreading risk when the result is catastrophic and doesn't happen often. But how do you apply it to things that happen all the time and are not usually catastrophic - like daily health care? No, insurance is a growing cancer on the body of our society and needs to be eliminated in it's present incarnation.
Of course, that's just my opinion.