Health insurance is not a scam. As nice is it to go to the doctor's and pay a $10 co-pay, that is not the purpose of health insurance. Max's wife, now that's health insurance. Without pulled risk, even Max :chuckles: would (presumably) have trouble putting together the payment. Less drastic, my wife giving birth would have cost $40,000 without health insurance--granted, she had a 38 hour labor and was on pain meds for 10 hours or so, so her charges aren't typical.
While society as a whole is paying, in any given year, more than their fare share, there will come a time when every single one of us will need it and will recoup the investment. What happens if we don't have health insurance? In situations like that of Max's wife, the hospital doesn't get paid. That happens enough, the system falls on its head.
Note, this discussion does not touch Universal Health. Universal heath coverage is, essentially, forced health insurance. We pay our premiums in the form of income taxes, the government acts as the insurer. In addition, it presumes that health insurance companies actually make good on their contractual obligations.
Car Insurance--Forced collision insurance is a good thing. Uninsured drivers are cost to society. Say you get hit by a 20-year old who's in college and has no occupation other than moderating this website. The parents aren't going to voluntarily foot the bill--kid's over 18, right? Get a lawyer? I'm not touching that case. There's no chance of recovery as the kid is judgment proof. If he had a house, we could put a lien on it, but he doesn't. Can we get the parents on the hook? Legal question based on state law, but it decreases the likelihood of success. Even if we recover, I'll recoup my expenses and take 40% of the judgment off the top as my contingency fee. (Note, I do not practice personal injury law and have never taken a case on contingency.)
Long story short, you're screwed and out the damage. If you're injured, health insurance will cover but the cost of your car? Done. If you have a lease, you continue to pay the premiums but you don't have a car anymore.
Life Insurance may or may not be a good idea. With a kid and a stay-at-home wife, it would be irresponsible for me not to have some life insurance. Thing is, term life insurance is dirt cheap at this point in my life. As we grow older, insurance becomes more expensive.
I haven't decided about whole life. Whole life is an insurance policy with a forced investment aspect to it. The premiums are much higher than term (for me, about 18 times) and the return on the investment is not so good at the beginning, as you pay the cost of insurance upfront. At some point, however, the return becomes excellent. The big advantage is that it grows tax-free and is only taxable at withdrawal. However, once you have a nice sum built up, you can borrow against your benefit and avoid paying taxes altogether.
That said, whole life is only recommended for those with considerable income--highest tax bracket types. Personally, I'm leery of committing myself. I'd rather invest the money myself.
Homeowners Insurance is a no brainer. First, you can't get a mortgage without it. Second, can you imagine a fire burning away your life's savings?
Renter's Insurance is worth looking into. I never had it. A friend of mine, though, had it and thank god. He lived in a multi-unit buidling in D.C. The tenant below must have knocked over a candle or something, but long story short, he lost all his possessions (he wasn't in his apartment when it happened). Computer. Furniture. Flat-screen. All his clothes, including four or five suits.
The insurance company put him up in temporary housing until he was able to get a new place, replaced his furniture, and gave him a stack of money to buy suits, TVs, etc. He still lost out a bit, as I don't think he got full value, but without it, he'd have been screwed royally.
Mortgage Insurance is a scam. In the old days, you could get around paying it by taking a primary loan at 80% of appraised value and by covering the rest with a 20% downpayment or with a second mortgage. Rules might have changed with the credit crisis/fallout, but I'm out of the loop in the lending world.