The real reason you buy insurance may have as much to do with pleasing your psyche as it does protecting your wallet. Behavioral psychologist Orit Tykocinski explores the connection between insurance and the reality-distorting risks of "magical thinking" that may make you reconsider your own rationale.

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Extract: 

We have to remember, insurance is an antidote, it's not a vaccine. It doesn’t ward off evil; it doesn't eliminate the risks that we face. However, when it comes to insurance, the distinction between an antidote and a vaccine somehow gets blurred in our minds. Why does it happen? It happens because people are not that good at assessing risks rationally. Let me give you an example. When I arranged my flight to come here, I had to decide if I wanted to buy travel insurance. Rationally, I should have based this decision on several considerations: the price of the policy, of course, the value of my luggage, the aggravation that I'm likely to experience if my luggage gets lost. And of course, the likelihood of such an event, right? But most of the time, we're just too busy to make such rational calculations. And anyway, I doubt that Lufthansa are very keen to share their damage statistics with me. So what do we do instead? We rely on our intuition.