OK, I oversimplified the numbers, but really... would you rather pay $2000 now or $50/year forever? How about $500/month? If you preferred $50/month, congratulations, you've understood the time value of money.
But in general, especially for a hobbyist, insurance does not pay. Compare the insurance premiums with what the bank would charge for a loan. If insurance company wants 2.5% of the value of the item and interest rate in the bank is 5%, you'd have to figure you break half of your gear for insurance to make sense.What are you talking about? ... You don't have to break half your gear for insurance to make sense, my 70-200 f/2.8 L IS II alone costs around $ 2000 ... paying 2.5% (i.e. $50 a year) is peanuts compared to not having an insurance and having the lens stolen/lost ... would you rather pay $ 50 or $ 2000.
Where exactly it breaks even depends on the interest rate etc, but nonetheless there is a monthly sum that's effectively the price of an "eternal loan" for $2000. For argument's sake let's say it's $200/month. Then your choice would be certain loss of $50/month with insurance, or possible loss of $200/month without. How likely would you have to be to destroy the camera for insurance to make sense?
And finally, do you think you can estimate that probability better than insurance companies?
You have gone from over simplifying to over complicated, we are talking about 2.5% insurance per year
... so I'm not sure what you are goin on about "eternal loan" and $200/month
I am really interested to know which insurance company is charging you $200/month (i.e. $1200 per year for a $2000 lens)
5D MK III, 16-35/2.8 L II, 24-70/2.8 VC, 24-105/4 L IS, 70-200/2.8 L IS II, 100/2.8 L IS, 40/2.8, 50/1.4, 85/1.8, 150-500 OS, 600EX-RTx2, ST-E3-RT, Rokinon 24/3.5 T-S, D7100+18-300 VR, YN568EX, 055CXPRO4+468MGRC2, 190CXPRO4+322RC2, Gorillapod Focus+496RC2, CamRanger, B+W filters, Konova K3/31.5 etc