Why Don't People Buy Insurance?

by Patrick Appel

Jonah Lehrer examines the cognitive biases surrounding health insurance:

We don't think about bunions or torn ligaments or strep throat unless, god forbid, the affliction happens to us. Unlike a plane accident or a shark attack, there is nothing newsworthy about ordinary suffering - kidney stones don't make the front page or the 11 o'clock news. (I've got several friends who purchased extended warranties for their computers but don't have health insurance. I'd argue that this irrational contradiction occurs for two reasons: 1) they are overvaluing their computer at the time of purchase, thanks to the endowment effect and 2) it's easier for them to imagine a broken computer than it is to imagine a broken body part.)