I think all of those thoughts about insurance make a lot of sense to me and are probably similar to how think about most of it. Insurance for catastrophe (life, health, home, legal liability) - yeah, people probably tend to underinsure themselves. Insurance for smaller trips, extended warranties - I'd probably even throw dental/pet insurance into this category although tend to think that is best looked at as prepaid care - I think people often buy "peace of mind" with these sorts of things when they would be much better off skipping it and self-insuring.
And, my comparison to
DVC purchases was just thinking about how much of the ability to exchange is based of a similar "peace of mind" feeling where that feeling is costing you more than it might need to. Obviously, the market will ascribe the value it deems appropriate to that feeling and my subjective opinion is just my opinion.
I've actually been thinking about this recently with the resale SSR purchase I made. I wonder whether I might have been better off going with resale RIV to supplement my direct points because the years left on the RIV contract combined with the benefits of home resort priority at RIV have greater value to me than the ability to exchange with the O14 resorts. Of course, my situation is different than someone brand new to DVC wanting to give as many resorts a go as they can.