Protection & safety · General financial education

Insurance as risk transfer

Insurance moves large, rare, financially heavy losses for a premium. Saving carries small, frequent expenses yourself. Those are different tools.

In more detail

A candidate for transfer: a large loss, little capacity to bear it, unknown timing. A poor candidate: amounts your buffer could regularly cover. Finmon sells no policies and rates no tariffs.

Background

The premium is the price of the transfer, not a return. Small losses that almost surely occur are often costlier to insure than to bear: a structural point, not a product slam. Country rules on compulsory cover live in country packs.

An example

An €80 phone screen and a six-figure liability claim are different: one resembles a planned expense, the other a transfer of a large rare risk.

A common misconception

Insurance is a form of saving and should repay every small risk.

Insurance transfers large rare losses. You often carry the small ones yourself.

Source: BaFin · Versicherungen für Verbraucher. Last reviewed: 2026-11-09. Editorially reviewed on 2026-11-09. Next review 2027-11-09. Version 0.2.0. Finmon explains. It does not advise. Not investment, tax or legal advice.