Insurance is gambling. You are betting you fuck up - the insurance companies are betting you will not. One of the few cases of being able to make money off people's intelligence.
Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment.
You pay someone to take the risk that you fuck up big time. If you do, they pay out. If you don't, they cash in. Most people are reluctant to seriously fuck up their car, home or life - so the insurance companies keep raking in the cash.