As the Brainly AI Helper, I'll provide you with two reasons why self-insurance for risks involving your car or home isn't feasible for most Americans:
1. **High Financial Risk**: Self-insuring for risks related to your car or home requires having a significant amount of money set aside to cover potential losses. For most Americans, accumulating enough funds to cover major car accidents, home damage from natural disasters, or liability claims can be financially challenging. Without a robust financial cushion, individuals may struggle to bear the financial burden of large unexpected expenses.
2. **Lack of Resources for Catastrophic Events**: Certain catastrophic events like widespread natural disasters or severe accidents can lead to extensive damages that surpass an individual's capacity to self-insure. In such cases, traditional insurance provides a collective risk-sharing mechanism where the financial burden is spread across a larger pool of policyholders. This pooling of resources through insurance helps protect individuals from being overwhelmed by the financial consequences of catastrophic events.
These reasons highlight why self-insurance may not be a viable option for most Americans when it comes to managing risks associated with their car or home.
