Governments often require people to obtain insurance; for example, all drivers are required to carry auto insurance to cover damages to others in the event of a crash. Homeowners are often required by banks to carry insurance on their home. Why do these requirements exist? Would they be necessary if people truly recognized the risk they faced? One characteristic of an overconfident person is that she is continually surprised when what she thought was unlikely or impossible comes to pass. What would happen in these cases if people were not required to insure? What problems might arise if governments also prepared for emergencies in a way that displayed overconfidence? What mechanisms could prevent overconfidence in government action?