The answer is “NO”, as many savvy consumers already know. Yet there are many other types of insurance increasingly being pushed on consumers that are just as bad a deal. In Tim Harford’s latest Undercover Economist column for Slate, he argues that consumers are increasingly insuring themselves against small risks, due to a combination of aggressive marketing of insurance products and deep-seated risk aversion.

There is plenty of overpriced insurance around, always bundled with some other product. A popular cell phone retailer will insure your $90 phone for $1.70 a week—nearly $90 a year. The fair price of the insurance is probably closer to $9 a year than $90. Economists are rarely tub-thumping consumer-rights activists. We tend to believe that people are smart enough to fend for themselves. But the commercial success of this kind of insurance is perplexing. The pricing is grotesquely inflated, but something more fundamental is also going on. A rational consumer should scarcely look at this kind of insurance, even at a fairer price.

Harford points us to a paper by Matthew Rubin and Richard Thaler which makes the claim that rational consumers should never buy insurance against small losses if it carries even a scant premium. A small loss is trivial in the context of our lifetime incomes, well north of $1,000,000 for many Americans. Yet this advice runs counter to the inflated psychological pain we often experience from even small losses.

Matthew Rabin and Richard Thaler pointed out in 2001, in a paper that surprised even their fellow economists, that anyone who pays even slightly more than the fair premium to escape from a risk on a $90 phone or a $900 insurance deductible must be making a mistake. The stakes are too tiny: In the context of a $1 million lifetime income, even $900 is a small enough risk to swallow. We should turn down these offers of insurance and save the money in a contingency fund to pay for the occasional loss. The odds would be well in our favor and the petty uncertainty shouldn’t cause us a single sleepless night.

But I know only two other people who actually behave like this, and both of them are wealthy economists. Why will the practice never catch on? Economic psychologists have determined that we find it impossible to put our losses into context. I should recognize that the value of my home fluctuates every hour by more than the value of the cell phone I put through the washing machine—but it will be the loss of the phone that upsets me, and it is the risk of that upset that the phone insurers will try to emphasize.

The correct response is to insure yourself only against the big risks, such as your house burning down. As for the dent in the rental car, you will simply have to tell yourself that in the scheme of things, it’s not that important. That is the closest that economics will ever come to Taoism.