Foundations

Protection: paying to make bad luck boring

Quidsmith Guides · Updated 2026-07-03 · 6 min read

Every few turns Quidsmith throws an unexpected event at you, a bill that lands straight on your current account and grows with every year you play. Protection policies do not stop the bad luck. They turn a frightening, uneven cost into a small, predictable one, so a single bad turn can no longer force a fire-sale.

Three lines of cover

Each policy is tied to a family of events. Pay the annual premium and, when a matching event lands, the policy reimburses part of the bill before it can push you into a liquidation.

Income protection covers employment shocks like redundancy and long sick leave, so it lapses the moment you retire. Buildings and contents covers the boiler, roof, flood, subsidence and burglary class of event, and only applies while you own the home those events fall on. Health cover handles private medical and emergency dental costs. There is deliberately no life cover: nobody dies before 100 in Quidsmith, so there would be nothing to pay out.

Every policy is an expected loss (on purpose)

Here is the honest part the marketing never leads with. Each premium is priced as the expected cost of a claim multiplied by a provider loading of about 1.4. In plain terms, for every £1 you can expect to get back over time, you pay roughly £1.40. Run the numbers across a whole lifetime and you will, on average, pay more in premiums than you ever claim.

So why buy something you expect to lose on? Because averages are not what end runs. What ends a Quidsmith run is a large bill landing on a bad turn, when the market is down and your cash is thin, forcing you to sell investments at the bottom or, worse, hit £0. Protection is not an investment. It is ruin insurance: you accept a small, certain drag in exchange for capping the size of the worst thing that can happen to you.

When it earns its keep

• When a shock would force a bad sale. If covering a typical event means liquidating your ETF in a downturn, the premium can be cheaper than the loss you avoid.
• When your buffer is thin. Protection and an emergency fund do the same job from opposite ends. Cash absorbs shocks you have saved for; insurance absorbs the ones too big to save for.
• Late in the run, on the home line. Event bills scale with the years you have played, so the same boiler failure costs far more at 70 than at 35. The premiums rise too, but so does the size of the disaster you are hedging.