Offer your thoughts or opinion on the input financial query or topic using your financial background.

Is insurance worth it if you can afford to replace the item? If not, when is it?
As a rule, purchasing fairly priced (minus a spread) insurance on items you can afford to replace is a bad idea. However, in addition to the points mentioned in the previous answers, one should note that many types of insurance are UNDERpriced because on average people do not make claims even though they are entitled to them.  If you purchase something moderately priced at Best Buy and get the extended warranty and it breaks down a year later, you will be unlikely to even remember that you purchased the insurance much less go through the trouble of making a claim.  More likely you will just go buy a replacement or whatever the latest and greatest iteration is.  It's like homeowner's insurance--an amazing number of things is covered but no one ever makes claims, so it is cheap.  If you are a person who remembers and utilizes warranties and insurance, there are many types of insurance that will save you money in expectation.   The other thing is that you know more about your own riskiness than the insurer does.  I had a girlfriend who bought super comprehensive insurance on her crappy old car.  I was quite stern with her about it but could not change her mind.  She totaled it a few months later.  They bought her a replacement.  She got in a more serious accident with that car and got yet another one in addition to payment of her medical care, which did not even go to her health care insurance.  Yes, her rates went up, but not fast enough to deal with how risky she was.  Another example: I used to carry an e-book reader around in my shirt pocket and read it any time I had a chance.  Cheap item and not that delicate, but since I had it with me all the time and used it constantly, it was a big risk for the store.  The extended warranty would have been a great idea. In short, avoid extended warranties and insurance on things you can afford to lose unless you know that you are high risk or are otherwise more likely than average to make a claim.