The large-loss principle recommends that you insure the losses you can afford to suffer and assume the losses that you cannot afford to suffer.

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The large-loss principle recommends that you insure the losses you cannot afford to suffer and assume the losses you can afford to suffer. This is because insurance is meant to protect against large, catastrophic losses that would be financially devastating, while smaller losses can be handled out of pocket.

The Large-Loss Principle Recommends That You Insure the Losses You