Yahoo is reporting that Art Buchwald has died. He was a remarkable man; one I will never forget for explaining insurance to me. Let me try to clarify.
Many years ago, he had an audio tape with a piece on insurance. In it, he noted that insurance is one of the few forms of legalized gambling permitted in every state. When you think about it, it makes a lot of sense. When I take out a life insurance policy, I’m betting I’m going to die, and the insurance company is betting I’m not. Actually, what I’m betting is that I’ll die in a specific way captured in the policy, e.g., I won’t commit suicide. The insurance company is betting I’ll die in a way they won’t have to pay off.
The same is true for other types of insurance. You place bets that you’ll get sick, or get in a car accident, or have your house burn down, or have something stolen… and the insurance company is betting that your life has nothing bad happen to it. The funny thing about this is that this is one bet you don’t want to win, because if you win, you lose in some sense… whereas the insurance company wants to win their bet, because by your losing, they win bigger.
It is a fascinating insight, and one I will always associate with Art Buchwald. I’ll miss his wit and wisdom.
P.S.: I should note that Art Buchwald did record his own obituary video; it is on the front page of the New York Times. It starts out with Art Buchwald saying “Hi, I’m Art Buchwald… and I just died.” Always one to capture the humor of the moment.