The more money you spend on insurance, any type, the more money you are risking in hopes of recovery with a problem. Seems backwards to me for my dollar. I'll think and invest in the positive.
I totally disagree with this way of thinking about insurance. I NEVER want to collect on insurance. I have no "hopes of recovery" at all. I am not risking a penny when I buy insurance and I really hope the insurance company keeps it all. I pay that cost so someone else takes on the risk.
It seems like we get these insurance threads every few months. Insurance isn't a bet. It is a fee paid for a service given. Insurance is all about transferring risk. If you do not have insurance you can save money, but you have greater risk. There is nothing wrong with that, as long as you understand it for what it is.
Liability insurance transfers the risk that my estate would be devastated by a claim. The more money you have (up to a point) the more you NEED liability coverage. If you have nothing, there isn't much need for liability coverage. I you have a million dollars, you will be sued for a million dollars. If you are a multi-millionaire then maybe you can self insure, but why bother for a measly two or three hundred dollars a year. I carry liability.
Imagine a crash. Imagine a widow and/or remaining owners getting hit with the bill from the energy company that had to deal with the downed power lines, and the entity dealing with the fires, and the recovery company that had to transport the wreckage. No widow, no estate and no co-owner? Then, no liability seems fine.
Liability coverage transfers financial risk.
Hull insurance covers plane replacement, and that decision is more nuanced, because there probably isn't a NEED to replace the plane. I carry hull insurance partly due to financial risk, but I could recover from a $70K loss. The reason I carry hull is because it is easier to pay an annual amount of ~$1000 then it is to talk my wife into another new $70K purchase. If my plane burned down (as one did as seen in posts on VAF this year) there is no way I could say "Honey, I want a new one" if I did not have hull insurance. For me, hull insurance protects my ability to own a plane if my current plane somehow becomes a total loss.