Human nature being what it is and always has been, most of us are much more careful with our own lives and property than we are with those of others.
Spreading or sharing the risk (which I believe is called "coinsurance" in the industry) encourages the purchaser to buy proper amounts of coverage and to take the best possible care of the insured item.
We should apply this principle to insured bank accounts, brokerage accounts, etc., to reduce the possibility for disasters such as the one we are seeing in the savings and loan industry. If S&L depositors had been 10% or 15% liable for their own losses, they would not have been rushing to deposit their money in the riskiest institutions merely to collect higher interest.
JOHN D. ANDREWS
Palos Verdes Peninsula