Billionaire Charlie Munger Said He Dropped Insurance After Getting Rich — 'All Intelligent People Self-Insure' If They Can Afford It

Most people don't look at their house, imagine it in flames, and think, "Eh, I'll just write a check." But Charlie Munger wasn't most people.

In one of his final public appearances—just months before his death at age 99—the longtime vice chairman of Berkshire Hathaway made a comment that raised eyebrows, especially considering the business he helped run. "Once I got rich, I stopped carrying fire insurance on houses," Munger said during the 2023 Daily Journal shareholder meeting. "I just self-insure."

Don't Miss:

• ‘Scrolling To UBI' — Deloitte's #1 fastest-growing software company allows users to earn money on their phones. You can invest today for just $0.30/share with a $1000 minimum.
• Maker of the $60,000 foldable home has 3 factory buildings, 600+ houses built, and big plans to solve housing — this is your last chance to become an investor for $0.80 per share.

It was a surprisingly personal stance from the longtime vice chairman of Berkshire Hathaway, a conglomerate that owns some of the biggest insurance businesses in the country—Geico, General Re, Berkshire Hathaway Specialty Insurance, and more. 

Still, Munger was unapologetic. "I'd rather tell it the way it is than tell it in a way that helps Berkshire," he said. "Even though it's bad for Berkshire, I want to tell you: if you can afford to self-insure, self-insure."

He clarified that he wasn't just talking about fire insurance. "In my own life, I'm a big self-insurer, and so is Warren," he said. "Why would you want to fool around with a claims process and all kinds of things?" His point was simple: if you're wealthy enough to absorb the loss, bypass the middlemen, avoid the red tape, and deal with problems directly.

Trending: Are you rich? Here’s what Americans think you need to be considered wealthy.

Today's Best Finance Deals

That's not to say Munger was advocating recklessness. He emphasized that the decision to self-insure only makes sense if you can comfortably handle the expense. "You should insure against things you can't afford to pay for yourself," he said. "But if you can afford to take the bumps… why would you want to fool around with some insurance company?"

And it's not an option for most people. If you have a mortgage, insurance isn't just recommended—it's required by lenders. Even homeowners who own their property outright might still be subject to homeowners association regulations or local ordinances that mandate certain types of coverage. In many cases, self-insurance isn't just risky—it's off the table entirely.

Munger knew he had the resources to take on the risk. "If your house burned down, I would just write a check and rebuild it," he said. And while that line might sound cavalier, it's really just an extension of how he viewed efficiency. He saw traditional insurance as a system bogged down by fraud, fees, and friction—and if you didn't need it, why get tangled in it?

See Also: Many are surprised by Mark Cuban's advice for lotto winners: Cash or annuity?

So, should you self-insure? That's a personal decision, and it's a risk. Munger's approach worked for him because he could afford for something to go wrong—and because he was willing to accept the consequences if it did. But unless you're ready to pay for the full cost of disaster, both financially and emotionally, insurance might still be worth the hassle.

It's a philosophy grounded in pure Munger logic: eliminate what's wasteful, do what's rational, and ignore the noise. Just make sure, before you follow in his footsteps, that you can actually afford the walk.

Read Next:

• The team behind $6B+ in licensing deals is now building the next billion-dollar IP empire — invest early at $2.25/share.
• Inspired by Uber and Airbnb – Deloitte's fastest-growing software company is transforming 7 billion smartphones into income-generating assets – with $1,000 you can invest at just $0.30/share!

Image: Shutterstock