The purpose of insurance is to protect you from the financial consequences of loss or damage of some sort. Insurance can be obtained for many eventualities such as natural disasters, car crash, illness etc.
Insurance limits your risk and provides financial protection against losses in the future. To provide this protection, an insurance company charges you a premium. If your house burnt down and you had insurance, you could claim part or the full value of the house (depending on the arrangement) from the insurance company.
If you are not sure about whether or not to pay for insurance, ask instead: ‘How would I cope without insurance if something went wrong?'