Goosebumps are a leftover reflex from ancestors with much thicker body hair. Tiny muscles at the base of each hair follicle contract, pulling the hair upright — in cold weather, that trapped a layer of warm air against the skin for insulation; when startled or afraid, it made an animal's fur puff out to look larger and more intimidating to a predator. Humans don't have enough hair left for either effect to do much, but the same nervous system reflex still fires involuntarily.