5% is nuts. They don't lose 5% of goods.
That being said I've shipped my vehicles are few times and always just taken the risk. Most recently (in early 2019) I shipped from Egypt to Canada was quoted 1.5% of the value for insurance.
PS. Love http://theroadchoseme.com :)
awww, thanks ! :D
And I guess there are more things that can go wrong than dumping cargo. Breaking in transit.
I don't know how you think insurance works as a business if you didn't already know that they charge more than the money they have to pay out?
But there's benefits from risk pooling. A small annual fee to not have to deal with most of the economic cost if my house burns down or if I get cancer is worth it in how it reduces volatility.
Once you have a high net worth, paying for small amounts of insurance becomes more questionable, because variability matters much less and because of the negative expected value of the transaction.
This model misses some of the corner cases. Title insurance and boiler insurance have loss ratios of almost nothing, for instance, but are extremely economically useful. (The real service they're providing is inspection and research to make sure that the risk is negligible before insuring the risk). Auto insurance has a negative EV, but when my carrier subrogated when someone rear-ended me it was useful and convenient. Insuring a package so that you don't need to investigate shipping calamities from your customers can be useful.