In DeFi to take out a loan of $100 you need to have collateral worth $200 or more. If the value of the collateral ever goes below $200 then it is immediately autosold. Moreover the collateral has to be on the blockchain as well, so concrete assets like houses cannot be used for this purpose.
The main issue with insurance is actually assessment. All smart contracts do is replace execution, which was never a hassle to begin with.
The main issue with insurance is actually assessment. All smart contracts do is replace execution, which was never a hassle to begin with.