Grandpa Davey a.k.a. Dave Ramsey claims that statistical probability of failure is 12% (cars, PCs, A/C units). So according to him buying extended service contracts is a waste of money to begin with.
Using that logic you could argue that ANY insurance policy is a waste of money. If that were not the case, no insurer would ever underwrite the policy (knowing that the probability is they would pay out more claims they collected premiums).
As always, the answer is that "it depends". It depends on your risk tolerance, how affordable the potential loss is, and the expected loss versus the premium cost.
I doubt many of us would go without fire insurance on their house even though the probability of a claim is much lower than 12%. But is a billionaire wasting money buying a fire insurance policy on his/her $5 million house? Interesting question.
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