  Are individuals, and developed countries in general, over insured? Everything from cars, to jobs, to health, so interest rate changes and currency flutuations seems to be insured these days.
Now, don't get me wrong, insurance is a nice thing to have. Most people can't afford to dish out tens of thousands of dollars if their car is smashed, or if they need major surgery. But in those cases the insurance works in such a way that small payments over time balance out the large bills that happen rarely. It's like paying on a loan before you need it, and perhaps never needing it, yet at the same time being able to draw on it multiple times. That's classic insurance, and its designed to handle big problems. What is appear more and more however is full insurance, that is designed to cover all the little problems that pop up. That is where the problem lies. As every little problem problem surfaces, the insurance takes it away, and no behavior is changed.
Normally when something bad happens, say getting a ding on their car, the people pay for the repair if they can afford it, and want it, and if they don't, they don't. With 'full' insurance that ding is repaired whether it's really necessary or not. This analogy can be extended to most about anything. People no longer exert any personal control on their spending, because it is not their money that is paying for it.
At least, that's what they think. In the end, the money that is payed into an insurance plan has to at least match what is paid out (plus overhead and profits) in order for an insurance company to stay in business. This relates directly to my urlLink previous post. There are things called derivatives in the financial world. What they are generally used for is to blunt the impact of price changes through-out the economy. Including exchange rates. Many economists recently have remarked that changes in the dollar's value is having a reduced effect from what is normally expected, due to the fact that so many companies have used these derivatives to insure against changes. As a result they are not reacting to changes in the economy as they should be, as they are too well insulated to notice. Health insurance is another big area where over insurance is taking its toll. With no incentive to pay attention to where a person's money is going, people are more likely to spend it unwisely.
Purchasing prescriptions that they may not need because the doctor is being pressured to push them. Getting unneccesary procedures done, because the cheaper plan is not covered under the HMO's plan. Overall health is allowed to deteriorate because if someone gets sick, they can just go to the doctor, no worries. As a result, health costs continue to surge year after year. All in all, I think insurance is starting to get out of hand, and we are starting to pay the price for it. Side note: urlLink HSAs are now available to help blunt the cost of medical care, while still letting the individual control what is going on. 
