The late Charlie Munger spent most of his life as vice chairman of Berkshire Hathaway (BRK.A) (BRK.B) a company built on insurance. In February 2023, at the annual meeting of Daily Journal Corporation (DJCO), where he was chairman, he was asked about self-insurance and answered in a way that worked against his own company's interests. “With one exception, I've never carried collision insurance on a car, and once I got rich, I stopped carrying fire insurance on houses,” he said. “I just self-insure. That is the right way to do it.”
Becky Quick, moderating, put the obvious point to him: he was the number two at a group stuffed with insurers; why not just tell people to insure everything? “I'd rather tell it the way it is than tell it in a way that helps Berkshire. 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 will tell you that if you can afford to self-insure, then self-insure,” Munger said.
