THE MEANING OF INSURANCE, BY AMBROSE BIERCE
INSURANCE, n. —An ingenious modern game of chance in which the player is permitted to enjoy the comfortable conviction that he is beating the man who keeps the table.
INSURANCE AGENT: My dear sir, that is a fine house — pray let me insure it.
HOUSE OWNER: With pleasure. Please make the annual premium so low that by the time when, according to the tables of your actuary, it will probably be destroyed by fire I will have paid you considerably less than the face of the policy.
INSURANCE AGENT: O dear, no — we could not afford to do that. We must fix the premium so that you will have paid more.
HOUSE OWNER: How, then, can I afford that?
INSURANCE AGENT: Why, your house may burn down at any time. There was Smith’s house, for example, which..
HOUSE OWNER: Spare me — there were Brown’s house, on the contrary, and Jones’s house, and Robinson’s house, which..
INSURANCE AGENT: Spare me!
HOUSE OWNER: Let us understand each other. You want me to pay you money on the supposition that something will occur previously to the time set by yourself for its occurrence. In other words, you expect me to bet that my house will not last so long as you say that it will probably last.
INSURANCE AGENT: But if your house burns without insurance it will be a total loss.
HOUSE OWNER: Beg your pardon — by your own actuary’s tables I shall probably have saved, when it burns, all the premiums I would otherwise have paid to you — amounting to more than the face of the policy they would have bought. But suppose it to burn, uninsured, before the time upon which your figures are based. If I could not afford that, how could you if it were insured?
INSURANCE AGENT: O, we should make ourselves whole from our luckier ventures with other clients. Virtually, they pay your loss.
HOUSE OWNER: And virtually, then, don’t I help to pay their losses? Are not their houses as likely as mine to burn before they have paid you as much as you must pay them? The case stands this way: you expect to take more money from your clients than you pay to them, do you not?
INSURANCE AGENT: Certainly; if we did not..
HOUSE OWNER: I would not trust you with my money. Very well, then. If it is certain, with reference to the whole body of your clients, that they lose money on you it is probable, with reference to any one of them, that he will. It is these individual probabilities that make the aggregate certainty.
INSURANCE AGENT: I will not deny it — but look at the figures in this pamphlet.
HOUSE OWNER: Heaven forbid!
INSURANCE AGENT: You spoke of saving the premiums which you would otherwise pay to me. Will you not be more likely to squander them? We offer you an incentive to thrift.
HOUSE OWNER: The willingness of A to take care of B’s money is not peculiar to insurance, but as a charitable institution you command esteem. Deign to accept its expression from a Deserving Object.