Why insurance

I had a conversation. They said insurance is for stuff you lose. My response, insurance is for stuff you cannot afford to lose. The amount you insure for should be enough to cover the replacement cost if it is property, the amount to protect your assets if it is for liability, medical costs, and in the case of life - provide for your family with the loss of your income. So why insurance, protect your family from lost by using insurance to make up for what is lost.