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For most people, insurance isn’t optional—it’s a given. Home, auto, medical, liability—you’re taught to protect your assets before you even finish building them. And while those monthly premiums sting, they’re the price of security, or so the logic goes.
But Charlie Munger saw it differently. And when you’re worth billions, you get to opt out of the rules the rest of us live by.
Just months before his death at 99, the legendary Berkshire Hathaway vice chairman made it clear: when he reached a certain level of wealth, he stopped insuring what he could afford to lose.
“Think of what I’ve saved in my life,” Munger said during the 2023 Daily Journal shareholder meeting. “I never carried—never—I think once… but with one exception, I never carried collision insurance on a car. And once I got rich, I stopped carrying fire insurance on houses. I just self-insure.”
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That remark came in response to a question from CNBC’s Becky Quick, who asked Munger about large companies—like Meta—self-insuring against major liabilities. Would the trend pose systemic risk? Munger didn’t take the bait. Instead, he turned the focus inward.
“In my own life, I’m a big self-insurer, and so is Warren,” he said, referring to longtime business partner Warren Buffett. “It’s ridiculous for me to carry fire insurance on my house because I could easily rebuild a house if it burned down. So why would I want to bother fooling around with the claims process and all kinds of things?”
His message wasn’t just personal. It was philosophical.
“If insurance—you should insure against things you can’t afford to pay for yourself,” he said. “But if you can afford to take the bumps… some unusual expense coming along doesn’t really hurt you that much… why would you want to fool around with some insurance company?”
And then came the line that caught everyone’s attention:
“All intelligent people do that way. I don’t say all… maybe I should say all intelligent people should do it my way.”
He elaborated further, with his trademark precision:
“There should be way more self-insurance in life. There’s a lot of waste. You’re paying when you buy insurance for the other fellow’s frauds—and there’s a lot of fraud in life.”
The statement shocked Becky Quick, who pointed out the irony: “That’s a little bit of a surprising take from a guy who is vice chairman at Berkshire, which has so many insurance companies.”
Munger didn’t soften the blow.
“That is the right way to do it. I’d rather tell the way it is. I’m not going to tell it differently than I think it really is just because it’s better for Berkshire. Even though it’s bad for Berkshire, I want to tell you—if you can afford to self-insure, self-insure.”
But that’s a massive “if.” Most Americans can’t casually replace a car, let alone rebuild a house. When wildfires swept through California last year, some homeowners lost everything—many still waiting on insurance payouts they couldn’t afford to skip. Then there’s liability: someone gets injured on your property, a guest trips at your holiday party, a contractor falls during construction—those aren’t just rare hypotheticals. They’re real financial threats.
Self-insurance means you’re on the hook for all of it. No safety net. And for most, that’s not realistic.
Still, Munger’s argument wasn’t about skipping protection altogether—it was about cutting out waste. If you can cover your own risk, why pay into a system bloated with fraud, commissions, and red tape?
That’s where smarter, more accessible options come in. Arrived is one of them—a platform that lets you buy fractional shares of vetted rental homes with as little as $100. You don’t manage tenants. You don’t repair roofs. And you don’t deal with insurance headaches. Arrived handles all of that while you collect rental income and potential appreciation.
You’re not self-insuring—but you’re not paying for someone else’s fire, either.
Munger’s stance isn’t practical for everyone. But his brutal honesty peeled back a truth worth considering: a lot of what we pay for in the name of “protection” is really just covering the inefficiencies of others. For the rare few, skipping insurance is a calculated risk. For the rest of us, choosing investments that minimize exposure—and maximize control—isn’t just smart. It’s survival.
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This article Billionaire Charlie Munger Says He Ditched Insurance Once He Got Rich And Self-Insured Instead As ‘All Intelligent People’ Do — ‘There’s a Lot of Waste’ originally appeared on Benzinga.com
