What is one of the key differences between insurance and a commodity like groceries?

One of the key differences between insurance and a commodity like groceries is that an application is required in order to obtain insurance. When you purchase groceries, you simply select the items you want and pay for them. However, insurance involves a more complex process where you typically need to provide information through an application. This process allows the insurer to assess the risk associated with insuring you and to determine the premium that will apply based on that risk assessment.

Additionally, if insurance were completely uniform and simple like purchasing groceries, the application process would not be necessary, as each type of insurance policy has specific underwriting criteria that must be evaluated. This is essential for determining coverage eligibility and pricing, which are tailored to the individual risk factors involved. In contrast, groceries are usually available to all consumers without any such personalized assessment.