Plain version: insurance helps the whole community recover and plan, but it is not free. Every dollar of claims, expenses and fraud is paid out of the premiums everyone contributes.
Benefits to society:
Loss payments help families and businesses rebuild after a loss.
Loss control programs help prevent fires and injuries before they happen.
Securing credit: lenders depend on insurance to protect the property that secures their loans, which makes them more willing to extend credit.
Costs to society:
Insurers' operating expenses.
Fraudulent claims, which push premiums up for everyone.
The carelessness that can follow from having coverage (morale hazard).
Exam tip: when a question lists benefits and asks for the exception, look for fraud or added expense. Those are costs, not benefits.