[HN Gopher] Home insurers are dropping customers based on aerial...
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Home insurers are dropping customers based on aerial images
Author : traviswingo
Score : 157 points
Date : 2024-04-06 14:52 UTC (8 hours ago)
(HTM) web link (www.wsj.com)
(TXT) w3m dump (www.wsj.com)
| walterbell wrote:
| https://archive.is/SSXdN
| consultutah wrote:
| Vexcel doesn't use drones. They use manned aircraft. Drones are
| almost never used for insurance. There are a couple of companies
| that do, but the costs are still too high for it to make sense.
| VHRanger wrote:
| I don't think the problem people have with this is the type of
| air vehicle used to take the picture
| jeffbee wrote:
| Surprisingly, it seems to me that you are wrong. People will
| absolutely lose their minds whenever they hear about an
| unmanned aircraft, but never talk about manned aircraft.
| There have been tons of news articles about "police drones"
| an other kinds of scaremongering, that never seem to note
| that the cops using an airplane to follow you in the dark has
| been a thing for decades. The _only_ new thing is the pilot
| does not necessarily need to sit in the aircraft.
| nneonneo wrote:
| _I_ would definitely mind if the police were following me
| personally in an airplane...
| jeffbee wrote:
| Did you recently rob a bank or carjack an old lady? If
| not, I sincerely doubt that anyone would go to the
| trouble of following you around.
| nneonneo wrote:
| Yes, but clearly an insurance company _will_ go to the
| trouble of flying a plane around my house. Whether it's
| manned or unmanned is immaterial - I wouldn't want them
| to do it.
| jeffbee wrote:
| You want to have insurance but you're not willing to let
| your insurer inspect the covered assets?
| s1gsegv wrote:
| Due to the cost of doing so, right. If the aircraft were
| suddenly unmanned and significantly cheaper to fly in
| potentially great quantities, it's easier to justify
| doing so "just in case."
|
| It's concerning to think that because police have
| traditionally had tools that were quite powerful in
| single use to balance out technology limitations of the
| time, this balance should not be rethought when the usage
| becomes significantly more efficient.
|
| If you have to get a black van and big dish microphone to
| surveil someone's single conversation in the park, it's
| going to be employed when there's already a strong
| suspicion, seems fair. Now if you're able to hide a
| wireless microphone in every tree, computer-transcribe
| everything that's said 24/7, and match it with cameras
| that can capture facial recognition data, you can build a
| file of everything everyone says in public, just in case
| you have to find something against them. What's more, you
| can have an AI scrutinize every single conversation and
| sentiment on a scale that is not otherwise possible.
|
| All of this uses the same fundamental rights, but clearly
| the outcome poses a huge problem.
| SilasX wrote:
| Haha exactly. Same thing for military drone strikes. I've
| noticed way too much of the debate focused on the "drone"
| part and not the "hey do you have an adequate process for
| target selection, civilian review, and consequences for
| targeting the wrong people?" The specifics of the hardware
| should be irrelevant to that question.
| _tom_ wrote:
| I suspect the only reason they don't use drones is range. Once
| they have a match, it'll be drones all the way.
| malfist wrote:
| If insurance is individually priced to this degree, what's the
| point of insurance?
| mb7733 wrote:
| Why would insurance being individually priced negate its value?
| The benefit of insurance is the pooling of the risk. The more
| individually it is priced, the more efficiently it works. (Not
| that I'm a fan of insurers spying on their customers from the
| sky...)
| gmd63 wrote:
| Insurance incentives would drive them to want to predict as
| accurately as possible who is going to cost them money, and
| then deny them coverage. They make money from selling to
| people who are afraid of a calamity but likely won't
| experience one.
| kjkjadksj wrote:
| Why are they in the business of denying coverage? They are
| insurance. They estimate their payouts from the entire pool
| and price your premiums accordingly. Paying out should
| therefore not really affect their bottom line if they price
| the premiums appropriately.
| gmd63 wrote:
| Home insurance companies are leaving Florida because it's
| not profitable to operate in an area with so much
| vulnerability to hurricane damage.
|
| Also, the only thing stopping medical insurers from
| denying coverage or increasing prices for people with
| pre-existing conditions is the Affordable Care Act.
| t0mas88 wrote:
| There is an important additional factor, regulators are
| setting limits on rates / rate increases. Florida is not
| profitable with those limits. If the insurance companies
| are free to set any rate, they would happily cover a high
| hurricane risk area.
|
| You can get insurance on very risky things. The way it's
| done is high rates and "reinsurance" which means the
| insurance company shares the risk (and premium) with a
| pool of other insurance companies. For policies with a
| large possible payout (e.g. a big ship or aircraft) this
| is always done, to avoid issues for the insurance company
| that gets unlucky enough to have to pay out.
| gmd63 wrote:
| Well apparently it's not hurricanes or regulation against
| accurate pricing, it's rampant fraud fueled by a state
| supreme court decision to incentivize winning cases for
| policyholders
|
| https://www.iii.org/press-release/triple-i-extreme-fraud-
| and...
|
| "Florida, however, is the site of 79 percent of all
| homeowners insurance lawsuits over claims filed
| nationwide while Florida's insurers receive only 9
| percent of all U.S. homeowners insurance claims,
| according to the Florida governor's Office."
| imgabe wrote:
| The whole point of insurance is that there is a
| relatively low probability of a relatively high expense
| event happening. In all likelihood, the thing won't
| happen to you, but if we all pool our money together and
| you are the unlucky person then you're covered.
|
| A pre-existing condition is not a low probability event.
| It is a 100% certainty that you have to pay for it. In
| that case the insurance is just a middleman who is
| increasing the cost of the thing you definitely have to
| pay for. You pay the insurance company, they take a cut,
| and they pay the healthcare provider. Why not just pay
| the healthcare provider directly?
| theptip wrote:
| Tail risk / volatility.
| imgabe wrote:
| At some point the cost of insurance would approach the cost
| of simply self insuring. Why should I pay the insurance
| company to maybe replace the roof if I can just keep $20k
| in a savings account in case I need to replace the roof?
| jcims wrote:
| Because at the limit, the size of the pool is one...you.
| mb7733 wrote:
| Accurately pricing insurance doesn't reduce the size of the
| pool.
|
| When you buy insurance, you aren't just pooling risk with
| other customers with the exact same risk profile as
| yourself. You're pooling with all customers of the company.
| (Plus all customers of any reinsurance company, etc.)
| rrix2 wrote:
| It's not being individually priced, people at higher
| risks are being forced out of their insurance options
| leaving only low-risk individuals priced in! Non-renewal
| isn't just some rate adjustment
| pishpash wrote:
| It is just a very high rate if they could charge it, but
| that's the point: when the uncertainty is nil, the
| premium will always be the replacement cost when the
| replacement is about to happen, so that there's no
| insurance.
|
| Put another way, if the insurance company isn't taking on
| any risk then you are.
| maxerickson wrote:
| Are there a lot of downsides to that for home/liability
| insurance?
|
| Obviously with something like medical insurance, where
| people often carry risks that are no fault of their own,
| there are downsides.
| maxerickson wrote:
| It seems perfectly reasonable to treat someone taking
| singular risks differently than someone taking average
| risks.
| twoodfin wrote:
| Exactly. And insurance is still a good deal even if the
| expected value for that one member pool is negative. In
| fact, insurance as a market doesn't work unless the average
| customer loses out. This is not a bad thing!
| pishpash wrote:
| The insurance paradox. If you can price every risk precisely,
| meaning the variance on your prediction is zero, there's no
| point to insurance because it would be the same as a savings
| account.
|
| There's no pooling of risk at all.
| edflsafoiewq wrote:
| Even if you know the probability of an event precisely, you
| still don't know if it will actually occur. And even if you
| know it will actually occur, you still don't know when, so
| insurance still provides diffusion over time.
| dragonwriter wrote:
| > Why would insurance being individually priced negate its
| value?
|
| Perfectly accurate insurance pricing would be for each policy
| to cost exactly the amount of covered losses in the period
| covered plus the overhead of managing the insurance, which
| obviously would be pointless.
| shepherdjerred wrote:
| That wouldn't be pointless, because you would have a
| predictable expense instead of an unpredictable expense.
| What you're describing is actually the ideal scenario for
| both individuals and companies.
| lamontcg wrote:
| Yes, so the insurance company should underwrite your roof
| for a fixed cost (adjusted for inflation) on your home.
| After 20 years of paying into that pool they shouldn't be
| able to just drop you now that your roof is old and
| pocket all the money and walk away and leave you with a
| roof that needs replacement.
|
| What I'd expect is that you pay into the pool and then
| after 20 years you've more than paid for the new roof and
| so you get a new roof.
|
| It should be slightly stochastic financing of your new
| roof and since a roof has a finite lifetime there should
| be a new roof at the end of it. It shouldn't be "hey,
| looks like your roof is about to have issues now, and we
| only insure new roofs, thanks for the profits,
| byeeeeee...."
| dragonwriter wrote:
| > That wouldn't be pointless, because you would have a
| predictable expense instead of an unpredictable expense.
| What you're describing is actually the ideal scenario for
| both individuals and companies
|
| No, if the expense were that predictable, the best case
| would be dispense with insurance entirely, since it
| effects the cost not at all and imposes overhead,
| especially insurance where the rates are accurately
| computed over short periods.
|
| Without uncertainty, there is no point in insurance.
| pclmulqdq wrote:
| If you can afford to rebuild your house after a fire, there
| will be no point (and there never was a point).
|
| Insurance has always been a negative-EV trade for the average
| person, but there have been mispricings that make it positive-
| EV when you have more information than the insurance company.
| However, the inefficiency meant that you also had to pay for
| the uncertainty on their estimate of your risk.
|
| With less uncertainty, the spread in the market should go down,
| and your premium should converge to something close to your
| actual risk plus the cost to assess your risk.
| lukevp wrote:
| Plus the salaries of the sales teams and the marketing budget
| and the executive bonuses and fancy offices... or were you
| rolling all that up into "cost to assess"?
| pclmulqdq wrote:
| Insurance is (theoretically) a competitive market, so no,
| those salaries are actually not included - aside from the
| compensation of the people building and conducting risk
| assessments. I'm not convinced most insurance companies
| make a ton off of home insurance specifically - I have
| heard that healthcare coverage (which is barely an
| insurance product) is the big profit maker, along with car
| insurance.
| nradov wrote:
| Most home insurers aren't really in the medical insurance
| business. And, as you indicate, most medical "insurance"
| companies no longer actually bear much risk. They make
| their profits by administering health plans for self-
| insured employers. The profit margin for that is low but
| the volumes are huge.
| orangecat wrote:
| _Insurance has always been a negative-EV trade for the
| average person_
|
| Negative EV in terms of dollars, but not necessarily utility.
| For most people, a 1% chance of losing their $500k home is
| worse than paying a $5100 premium.
| bottom999mottob wrote:
| Higher liability means they need to extract more money from
| you. That's the point of insurance. See: wildfires in
| California and flooding in Florida causing insurers to pull
| out. Once the insurance companies lose money, the risk is too
| high...
| op00to wrote:
| To make you whole after a loss that you would be unable to pay
| for out of pocket. Fire, major water damage ... that's about
| it.
| skybrian wrote:
| If you could predict which house will burn down, there would be
| no point:
|
| "All I want to know is where I'm going to die, so I'll never go
| there." - Charles Munger
|
| But we don't actually know the future that well, so even if we
| know that some houses are riskier than others, it's still worth
| buying.
| antisthenes wrote:
| Undeclared trampolines? What kind of insurance is this?
|
| I don't remember my house insurance (or medical, or any other
| kind really) being this detailed. I just picked rough estimates
| for the value of my structure and the items inside, and that was
| about it? There might have also been a waiver about not doing any
| hazardous activities like open fires or storing chemicals on the
| property.
|
| It definitely wasn't this detailed.
| 1123581321 wrote:
| I was asked about a trampoline with two major carriers. I
| believe they would have been satisfied to know it was netted,
| similarly to how they want pools fenced.
| egeozcan wrote:
| After reading that, my mind is generating weird scenarios in
| which undeclared trampolines are causing tragedies.
|
| Trampolines can indeed cause accidents but is that big of a
| risk to have one? That feels so out of place it's beyond
| comical.
| mikepurvis wrote:
| Probably a case of trying to get something out of the
| information that happens to be available. Maybe they'll also
| adjust your rates based when you get your roof redone or
| whether you park in your driveway?
| flutas wrote:
| It's probably about risk more than anything.
|
| Trampoline installed well (i.e. staked down) with proper
| netting = who cares
|
| Trampoline unsecured, no net = wind risk, personal injury
| risk, death risk
| kjkjadksj wrote:
| Honestly from growing up the riskiest bit was when the
| springs gave out from holding the material. Net or no kids
| are going to drag it over to the garage one day and jump
| from the roof onto it. Better hope the webbing the springs
| mount into is in good shape.
| secabeen wrote:
| Generally yes, because the liability for injury would be on
| you, as the trampoline owner. Compare the probability of a
| guest breaking their leg when visiting your home vs if you
| have an unsafe trampoline. Insurers are prepared for the
| small risk in the former, but have not priced in the latter
| risk to a standard policy.
| devbent wrote:
| Trampolines are obscenely high risk and injuries are very
| common. On top of that, if a neighborhood kid comes in to
| your yard and breaks their leg on your trampoline, your
| home owners insurance is going to be involved.
| doubled112 wrote:
| Is this something we just don't worry about in Canada?
| Because we only pay to park at the hospital?
| devbent wrote:
| Possibly. Health insurance companies may want to sue the
| home owner insurance company to try and recoup costs.
| 1123581321 wrote:
| You still have to cover the extended medical care in
| Canada and they are often bigger than the initial
| hospital stay in the most expensive cases in either
| country (years-long therapy, chronic injuries, etc.)
|
| The tortable aspect (compensation for causing personal
| injury) must also be covered.
| t0mas88 wrote:
| Probably the liability is also different? You're much
| more likely to be liable for some things in the US
| compared to other places.
|
| In my part of Europe, if someone breaks something while
| making normal use of your trampoline that would be
| considered an accident. You would only be liable if you
| had grossly neglected maintenance on the thing, knew that
| (or would reasonably be expected to know that), and they
| can prove that this has caused the injury.
| dylan604 wrote:
| This is the main thing. Insurers know that the home owners
| are not going to file claims for their own family members.
| It is the ambulance chasing lawyers that target the
| insurance when guests are injured on your property. There
| have been claims against poorly maintained walkways when
| the ice is not removed when someone slips on your property.
| Much like how retail stores all now have Wet Floor signs
| from all the people getting "injured".
| nick7376182 wrote:
| Family members are often excluded from the coverages. I
| know they are excluded from medpay, for example.
| op00to wrote:
| Yes. Growing up I saw my friend's foot pointed the wrong
| direction after a "double bounce" caught his foot in the gap
| between the trampoline surface and the supports. We were
| careful kids.
| syndicatedjelly wrote:
| Idk how any of us survived the 90s with trampolines in
| constant use! We would jump off them into pools, jump onto
| them from the roof, double bounce each other half a dozen
| feet in the air. I even mastered the "art" of jumping off
| of it and landing on the ground (from 6 feet up), rolling
| and popping back up.
| op00to wrote:
| A few of us didn't, I guess. I don't think they're
| dangerous to ban, but I would never own one for my kids.
| Sorry, kids!
| t0mas88 wrote:
| We also sat in the luggage area of a station wagon with 5
| kids on the way to the swimming pool... That would
| probably get the driver arrested if you did it today.
| giantrobot wrote:
| Neat. Survivorship bias.
| roywiggins wrote:
| Trampolines break a lot of bones.
|
| https://www.mayoclinic.org/medical-
| professionals/pediatrics/...
| gosub100 wrote:
| N=1 but there was a news story from a few years ago where a
| teen severed his spinal cord on one from landing on his head
| after a flip. I'm sure most of the claims are from simple
| orthopedic injuries with $5-$25k amounts but it only takes
| one paralysis claim to wipe out your risk model.
| newprint wrote:
| Hello ! I writes software that deals with Home insurances. 1.
| Staggering number of people are getting seriously hurt on
| trampolines each year, so other people can sue you (=>
| insurance company) for injuries. It is on your property (((. 2.
| Same thing with pets and "vicious" dogs breeds on your
| property.
| bastawhiz wrote:
| In my life, I've gotten three home insurance quotes, and every
| single one has asked about trampolines. And I do know at least
| two people who have been seriously injured on trampolines, so I
| can't blame them: they'd be liable for accidents.
| sys_64738 wrote:
| Homeowner insurance isn't just about the liability of the
| damage to your home from weather elements. A major part of it
| is liability you have to others who may have medical or other
| damage associated with your property. E.g. tripping over a
| paving stone, tree on your land falling on a neighbor's
| structures, dog attacks by your dog, etc.
| sgerenser wrote:
| Last insurance quote I got asked about trampolines, playground
| structures, dog breed, known risks like aluminum wiring or
| polybutylene piping, whether all doors had deadbolts, distance
| from nearest fire hydrant, and probably a dozen other things
| like this.
| sircastor wrote:
| I'm going to assume that nobody's insurance premiums or
| deductibles are going down from this data. No analysis is making
| the insurer say "Oh, that roof is in much better condition
| despite its age."
|
| Insurance feels like the biggest scam in the history of the
| world. You are legally obligated to pay us for nothing, most of
| the time.
| mb7733 wrote:
| This doesn't make sense. If an insurance company wanted to
| charge higher premiums, they would just do so. They wouldn't
| need to spy on customers.
|
| The point of them trying to quantify risk as accurately as
| possible is to be able to extract profit while also offering
| competitive rates.
|
| It's the same as with any other company. They try and operate
| as efficiently as possible (ie. reduce costs) to try and make
| more profit, while competing on price.
| currymj wrote:
| from reading this article, it seems like there may be some
| odd short-term pressures, or incentives internal to the
| companies, that mean policies are getting cancelled based on
| clearly inaccurate information.
| VHRanger wrote:
| Ah, classic mistake here.
|
| If bargaining power is asymmetric between the insurer and the
| buyer, then the extra information is used for additional
| price discrimination (eg. Its better for you if the picture
| is never taken regardless who you are).
|
| So the question is: does the insurer or the insured have the
| bargaining power here? Competition helps, but is only one
| part of it.
|
| Seeing that insurers seem very profitable in the US, a decent
| proxy for bargaining power, I'd argue this is a bad thing for
| the consumer.
| bvan wrote:
| If insurance was very profitable 'in the US', top-tier
| insurers would not be leaving states like Florida and
| California. There is a reason why they decide to no longer
| cover wildfire losses or hurricane losses. In the case of
| Florida, rampant fraud has turned the market into a basket-
| case.
| tfehring wrote:
| > * If an insurance company wanted to charge higher premiums,
| they would just do so.*
|
| That's not an option in many cases. The first homeowner
| featured in the article is in rural Northern California. CA's
| insurance regulator has been extremely restrictive about
| letting insurers raise rates, especially in that area, so her
| insurance premium was probably a fraction of the expected
| cost of insurance claims.
| lokar wrote:
| My insurance company sent an inspector to check the house. As
| a result he adjusted some details of the policy that reduced
| the rate slightly.
| ozr wrote:
| Insurance carriers have an incentive to compete on price like
| any other business. There are plenty of options. The margins
| are generally pretty small, and there is a lot of regulation
| around what portion of payments _must_ be used for claims.
|
| There's a few obvious exceptions, but plenty of insurance isn't
| required.
| sneed_chucker wrote:
| They might have an incentive to compete, but I think they
| also have an incentive to collude. Last time I shopped around
| for insurance it seemed like the latter was taking place.
|
| You're required to get homeowner's insurance if you have a
| mortgage, and you're required to have car insurance if you
| want to drive a car on public roads.
|
| So the majority of Americans are forced to purchase at least
| one of these in order to live their normal lives, which makes
| demand inelastic.
| lokar wrote:
| For the car, you only need liability, and you can generally
| post a bond instead.
| overstay8930 wrote:
| Collusion is nearly impossible in commodity insurance (i.e.
| policies you can buy on a website), it's just way too easy
| to detect and whistleblowers know they can make a fortune
| by reporting it.
|
| It's mostly your own governments fault if you can't find a
| cheap policy, there are millions of people who will
| probably never have to file an insurance claim in their
| life making up for government decisions to insure people
| who wouldn't normally be able to be insured because of poor
| decision making skills.
| ozr wrote:
| You aren't required to purchase a home or drive a car. If
| you chose to, as most Americans do, then yes: the demand is
| inelastic.
|
| But that doesn't imply what you're saying unless the
| supplier has monopoly power, which they, by law, do not.
| overstay8930 wrote:
| > No analysis is making the insurer say "Oh, that roof is in
| much better condition despite its age."
|
| That's exactly what they do. There are people getting paid
| millions of dollars to create software that does this.
|
| Do you know how much money an insurance company can print if
| they can undercut the competition by selling a bunch of
| policies to people who won't file a claim?
|
| People pick insurance based on price, and if someone is selling
| you a cheaper policy because they know your roof is better,
| you're going to buy it from them.
|
| They win because you'll pay a premium without filing a claim,
| and you win because you can have a cheaper policy. That's how
| it works in the real world.
| tptacek wrote:
| You're not legally obligated to pay for homeowners insurance.
| hilux wrote:
| It is probably required if you have a mortgage.
|
| And of course it's a practical requirement for anyone whose
| net worth is primarily in their home.
| tptacek wrote:
| That's not a legal requirement, that's people with money
| being unwilling to give it to you if you're reckless enough
| not to insure your collateral.
| ska wrote:
| > I'm going to assume that nobody's insurance premiums or
| deductibles are going down
|
| That's exactly backwards. If you have better information than a
| competitor, you have an effective strategy to steal their
| lower-risk customers and still make a ton of money.
|
| This absolutely will happen. And the rates for the higher-risk
| customers they are left with will absolutely go up.
| woopsn wrote:
| The insurance scam is, classically, someone getting a policy on
| an asset they know is worthless, going to catch fire, suddenly
| die, etc. -- and you do pay higher rates as a result.
| landedgentry wrote:
| I'm less concerned about the spying and more concerned about
| insurance companies arbitrarily non-renewing policies with no
| recourse for the consumer. Insurance is heavily regulated for
| good reason, and insurance should be a source of stability
| instead of anxiety.
| dmoy wrote:
| Do you live in CA? In recent years that's the majority of
| arbitrary cancellations I've heard about - companies pulling
| entirely out of CA.
| bluejekyll wrote:
| Similar reports are coming out of Florida. Generally, it
| seems the industry is pulling away from higher risk to
| climate change issues from larger storms or fire risk.
| dmoy wrote:
| Yea I think that is exactly correct
| tfehring wrote:
| There's a saying in the insurance industry, there's no such
| thing as a bad risk, only insufficient premium. Natural
| catastrophe risk is definitely increasing, but the
| insurance industry can handle that. The fundamental issue
| is that regulators in many states (including CA and FL)
| won't let insurers charge enough to compensate for that
| risk.
| rufus_foreman wrote:
| That's not the issue in Florida. The issue in Florida is
| that "although Florida only accounts for 9 percent of the
| country's home insurance claims, it is home to 79 percent
| of the country's home insurance lawsuits".
|
| That's from https://www.bankrate.com/insurance/homeowners-
| insurance/flor..., which explains how the roofing scams
| work in that state. The legislature is working on it.
| howard941 wrote:
| The legislature already worked on it. It had its way with
| it, totally. Despite the "work" that was done rates have
| skyrocketed. We're so deregulated there's no room for any
| additional work that doesn't break down the front door
| and walk out with stuff
|
| What's actually happening in Florida is the insurance
| companies are Janus entities. One part is an insurance
| company that's subject to rate regulation and the other
| part is a consulting firm that gets paid large sums of
| money from the regulated company and that's where all the
| profits live.
| hn_throwaway_99 wrote:
| I 100% agree with landedgentry. I don't really have any
| problem with insurers using drone photos - anyone can take
| drone photos of anyone else's property - and I'm not really a
| fan of the article calling it "spying" to imply some special
| kind of nefarious behavior.
|
| But I _do_ think the total bullshit is that companies are
| just using it to come up with essentially fake reasons to
| drop customers:
|
| > Cindy Picos was dropped by her home insurer last month. The
| reason: aerial photos of her roof, which her insurer refused
| to let her see. ... Her insurer said its images showed her
| roof had "lived its life expectancy." Picos paid for an
| independent inspection that found the roof had another 10
| years of life. Her insurer declined to reconsider its
| decision.
|
| I also don't have a problem if an insurer decides to leave a
| state entirely - that decision is essentially saying the
| state has made it impossible for them to adequately price
| risk, and that's something the state should fix if so
| desired.
|
| But these BS cancellation reasons seem like a case of
| insurers wanting to have their cake and eat it too. I'm not
| very familiar with state-by-state insurance law, but I'm
| assuming they have to come up with _some_ reason to drop a
| homeowner that already has a policy, so this looks like they
| 're trying to find BS reasons to just drop potentially less
| profitable parts of their portfolio.
| halfcat wrote:
| Why aren't insurance companies required to operate like
| market makers in the equities markets, where they're free
| to choose the price they're offering, but must offer a
| price in the market they're in?
|
| If the roof needs replacing (in the insurance company's
| view) then charge whatever the rate is that covers that and
| still makes them a profit. Don't just deny coverage.
| overstay8930 wrote:
| They will just charge the customer the price of a new
| roof, there's no point in what you're asking for.
| rybosworld wrote:
| If you ever look at the options chain on a thinly traded
| equity, you'll notice small volume and very large bid/ask
| spreads. Sometimes the bid/ask spread is so large that it
| looks like a computer glitch.
|
| The primary insurance market is even _more_ illiquid than
| thinly traded options.
| overstay8930 wrote:
| Independent inspectors almost always say what whoever is
| paying them wants to hear (see: Florida). 10 years left on
| a roof usually means the next large wind storm will take it
| out, they're not paid to look for that.
| hn_throwaway_99 wrote:
| But independent inspectors usually generate a report that
| explains at least some of their rationale. Even if it is
| biased, it can at least be scrutinized.
|
| That is in sharp contrast to the insurance company that
| is supposedly making their determination based on drone
| photos _that they won 't even let their clients see_.
| overstay8930 wrote:
| If multiple insurance companies say you need a new roof,
| you need a new roof. Full stop. There's no justification
| necessary.
| hn_throwaway_99 wrote:
| Quite literally, what are you talking about? There were
| no "multiple insurance companies", there was a single
| insurance company that dropped the policy holder quoted
| in the article.
|
| Besides, the article quotes from insurance company
| _agents_ that directly refutes what you are saying:
| "Brink, who worked for Farmers in Michigan, said some
| customers were dropped based on aerial images that were
| two or three years old. One person wasn't renewed because
| of a roof, despite its being brand new."
|
| Full stop. (I just like how people think that adding
| "full stop" to their comments somehow makes their
| position unassailable or something...)
| otteromkram wrote:
| But, profits.
|
| How else are execs going to pay for that third vacation home?
| dylan604 wrote:
| Does that third vacation home get spied on from the sky as
| well?
| reactordev wrote:
| I'm sure it does but he knows Bob and Bob can just flip a
| bit in a database to make it "compliant".
| nradov wrote:
| In some states it's the heavy regulation which is causing
| policy non-renewals. When governments fix prices below the
| market rate that inevitably leads to shortages.
|
| It's a stressful situation for many property owners. They may
| not realize the impact that recent high inflation has had on
| repair costs, especially when prices tend to spike up higher
| after major disasters.
| upofadown wrote:
| This sort of opportunity to find a rationale for cancelling an
| individual insurance policy will inevitably by used for evil.
| See: Insurance Redlining.
| reactordev wrote:
| Or you thought cancelling cable was hard now...
| danielmarkbruce wrote:
| No one, including companies, should not be forced into
| contracts they don't want to enter into.
|
| In practice, you are going to find they are never arbitrarily
| doing it. They are doing it because the price no longer covers
| the cost of providing the insurance. Just like when I decide
| the price of X isn't worth it anymore, I stop doing the
| transaction. The reasonable response would be to increase the
| price, but in some situations it's not possible due to
| regulation.
| j45 wrote:
| Except when those companies have lobbied to create laws to
| make the use of their industry mandatory.
| Analemma_ wrote:
| I could be wrong, but I don't think there are any states
| where you are required by law to have home insurance. The
| issue is that banks won't underwrite a mortgage for an
| uninsured house, because without insurance it's a
| completely unsecured asset whose value would go to zero at
| any time. (And if a bank won't write a new mortgage for it,
| the value drops dramatically even if it's already paid off,
| because now the potential market is limited to cash-only
| buyers for a risky asset)
|
| You're free to go without insurance on a house that you
| own, but so long as the bank owns it, they're going to make
| insurance mandatory, and that has nothing to do with
| lobbying.
| epolanski wrote:
| You are not wrong at all.
|
| Home insurance isn't mandatory, but refinancing your
| mortgage is impossibile without one.
| marcosdumay wrote:
| > whose value would go to zero at any time
|
| No, it wouldn't. It would go down to the value of the
| land (where a construction is permitted).
|
| Nowadays, that's often more than 90% of the price.
| robocat wrote:
| > value of the land
|
| Only very approximately - it depends on contextual
| situation.
|
| We had a ton of uninsurable "as-is" houses after the
| Christchurch Earthquake. Prices for those houses dropped
| massively because without a mortgage you only get cash
| bidders so demand was relatively low compared with
| supply. The price someone is willing to pay for an as-is
| property depends on many factors, and it can easily be
| below land valuation.
|
| Firstly desperate or naive sellers would accept well
| below the land value. You assume that that there are
| enough buyers to compete. There were not enough buyers
| shortly after the quake because not enough had cash so
| there were very cheap properties. Plus you were buying
| risk too - you simply couldn't price correctly because
| there were too many unknowns - when _whole_ suburbs are
| uninhabitable a new construction is irrelevant. The city
| population dropped significantly.
|
| You could offer below land value on some properties
| because you are also purchasing a liability e.g. the
| council required some houses to be demolished & removed
| (demolition costs were tens of thousands - and demo
| companies were busy as fuck).
|
| You might pay a lot more than land value:
|
| * Some places could still be rented (uninsurable is not
| uninhabitable) so potential income mattered.
|
| * Many places just needed work done - sometimes not much
| - but often a new foundation e.g. lift house and put in
| new foundation. New foundations had to be compliant with
| earthquake strengthening rules so usually very very
| expensive. The as-is homes were often sold by the
| insurance companies because they were uneconomic to fix.
|
| I advise everyone to be very careful buying property in
| suburbs or cities where all houses have common/correlated
| risks of an event - floods - fire - etcetera. Insurance
| premiums will rise until it is unaffordable - then all
| houses will not maintain value. Disclosure: I do live in
| a flood prone suburb but I can afford to self-insure and
| most people cannot do that.
|
| Even worse: insurance did not cover the financial losses
| for many people in the Christchurch Earthquake.
| Especially small businesses. Then again - many other
| people ended up with huge payouts and were financially
| much better off. However even then money is usually a
| poor substitute for emotional costs.
| toast0 wrote:
| Car insurance isn't mandatory; proof of financial
| responsibility is. In California, you can get a compliant
| insurance policy, deposit $35k with the DMV, setup a
| compliant $35k bond, or a self-insurance certificate which
| requires a larger deposit and is really for commercial
| motor vehicle carriers. I don't think it's unreasonable to
| require means to pay for damages when operating a motor
| vehicle; it doesn't take much to cause damages well in
| excess of California's deposit amount; washington state
| requires $60k.
|
| For home insurance, usually it's a mortgage requirement,
| which is not by law. In condominiums, the community may
| require it of individual owners, and then it's not really
| law either.
| tptacek wrote:
| Side note here on how ludicrous it is that you can
| substitute a $35,000 bond for a real insurance policy,
| given the likelihood that any driver is going to cause
| losses far in excess of $35,000.
| creato wrote:
| The 35k bond doesn't preclude getting sued for an
| unbounded amount. Presumably the idea is that a 35k bond
| demonstrates you have more available in case of a
| judgment.
|
| That said, that seems like a risky idea in a world full
| of LLCs, trusts, etc.
| dragonwriter wrote:
| No. it demonstrates exactly the same minimum ability to
| pay as the alternative minimum deposit or insurance
| coverage, which are also $35k.
| tptacek wrote:
| Not having any insurance coverage at all doesn't preclude
| you from getting sued for an unbounded amount.
| toast0 wrote:
| Minimum insurance in California only covers the same
| $35,000. $15,000 for injuries to one person, $30,000 for
| injuries to multiple people, and $5,000 for property
| damage.
|
| It's completely insufficient, but it's not nothing. A
| reasonable person would carry much more insurance.
| dragonwriter wrote:
| $35,000 is also the minimum liability coverage ($30,000
| for death or injury to multiple people plus $5,000 for
| property damage.)
|
| In either the bond, deposit, or liability insurance
| scenario, the responsible party remains on the hook for
| whatever is not covered in advance.
| j45 wrote:
| Fair, but there are lots of places, like Canada which
| require some types of insurance by law.
| toast0 wrote:
| I'm unfamiliar with Canadian law, can you provide an
| example jurisdiction and required coverage?
| cldellow wrote:
| In Ontario, the Compulsory Automobile Insurance Act [1]
| requires that all owners/lessees of vehicles take out
| insurance policies. The Insurance Act [2] sets out that
| the minimum amount should be $200,000.
|
| $200,000 is a much better floor than, for example, Ohio's
| $25,000. An Ohioan friend was injured by a motorist who
| had the minimum coverage. Her care cost more than that.
| The motorist who caused the injuries didn't have a lot of
| assets and she was unable to recover the excess from the
| motorist.
|
| Still, there are some perhaps unintended downsides.
| Canadian rental car companies, as the owners of the
| vehicles, are obliged to provide $200,000 insurance as
| part of every contract. As a result, it seems there's not
| much market for them to sell excess liability insurance,
| and none do that I'm aware of. I, as someone who has
| plenty of assets to lose if I injured someone, would
| happily buy a higher liability insurance. Doubly so when
| I rent a car to travel to the US, since the terms of the
| contract are often "the rental car company will provide
| the minimum insurance required in the jurisdiction where
| the claim is incurred".
|
| [1]: https://www.ontario.ca/laws/statute/90c25 [2]:
| https://www.ontario.ca/laws/statute/90i08
| halostatue wrote:
| https://duckduckgo.com/?q=ontario+minimum+automobile+insu
| ran...
|
| https://www.ontario.ca/document/official-mto-drivers-
| handboo...
|
| https://www.ibc.ca/insurance-basics/auto/types-of-auto-
| cover...
|
| For the US:
|
| https://www.forbes.com/advisor/car-insurance/minimum-
| require...
| j45 wrote:
| The links below beat me to it.
|
| Auto insurance is mandatory, and it can be government
| run, or private.
|
| Other areas of insurance can be indirectly required, say
| one side of renting, etc. Effectively lenders can set the
| conditions they desire.
| VHRanger wrote:
| Thats exactly the problem with insurance.
|
| If I have any sort of risk mitigation (file backup, fire
| alarms, spare tire, a generator, whatever) I can test that it
| works periodically. So I know I'm actually safe for the event.
|
| For insurance, you can't know what bullshit they'll come up
| with to deny a claim when the time comes for it.
|
| You're left with having paid for the insurance all that time
| for nothing! Much better to have put that money in a piggy bank
| instead.
| ametrau wrote:
| Well technically you were paying for their obligation to pay
| for you. Which is a real thing of value.
| bvan wrote:
| You assume it's bullshit. Difference.
| treflop wrote:
| I've known plenty of people who had legitimate accidents not
| of their own fault where insurance made them more than whole,
| and they would have not been able to afford the replacement
| if they had simply been saving for the same amount of time.
|
| If you actually feel like you could recoup of the cost of
| paying for insurance by instead keeping the money in a piggy
| bank, you are buying too much insurance. There's a sweet spot
| for insurance and overpaying for too little insurance is a
| you-problem.
| brogrammernot wrote:
| Alright, I spent years working and building 0-1 insurance
| products. Let me peel back some stuff that's been happening
| behind the scenes.
|
| Some officials are elected and some are appointed which all
| depends on the state. Appointed officials are usually more
| reasonable and elected are not because higher rates = mad
| voters = re-election chances lower.
|
| For a long time, insurers have struggled to get sufficient rate
| changes approved. A literal quote for you during Covid was,
| "Son, I'm looking out my window at downtown {city} and I don't
| see many cars on the road. We won't approve the rate
| increases."
|
| This was with actual data of losses increasing due to supply
| chain disruption of auto parts, labor increases and many more
| things.
|
| We basically had to write policies and hope for the best
| despite knowing the data / trend lines forecasting major
| losses.
|
| Fast-forward and what do you have - major losses by all of
| these companies - and so these companies have two choices: -
| Try to get rate approvals - Exit the market or line of
| insurance
|
| For California, the latter is the better option because at
| least for auto you cannot use credit, telematics or other very
| predictive attributes to price the risk. This results in
| essentially pooled risk which in aggregate drives up rates for
| all. Simply put, California officials did this to themselves.
|
| For other states, the first option works but the rate increases
| are now significantly higher because it was near impossible to
| get any adequate rate increases last few years.
|
| So, the bill has come due and it sucks for everyone as it's
| either a) higher prices or b) can't get insurance (Florida
| folks for certain types) or c) limited suppliers not being able
| to get reinsurance to share the risk results in higher rates
| that customers can't afford so they go without.
| jjtheblunt wrote:
| I'm not seeing you motivate or justify the rate increases.
| lokar wrote:
| The insurance companies are loosing money. Rates have to go
| up.
| epolanski wrote:
| And not just a bit. Insurances have lost money for most
| of the last 5/6 years.
| bagels wrote:
| They are not all losing money.
| stalfosknight wrote:
| And yet there's seems to always been enough money for
| stock buybacks and disgustingly excessive executive
| compensation.
| jjtheblunt wrote:
| In insurance companies?
| stalfosknight wrote:
| In most publicly traded for-profit organizations.
| jjtheblunt wrote:
| i think "most" isn't necessarily right since selection
| bias applies : ones not making money get delisted from
| public trading, so don't pull down an average, skewing
| it.
|
| another couple quirks: stock buybacks generally inflate
| the value of remaining shares (not bought back) for the
| public traded company shareholders...what they hoped for
| when acquiring shares. some companies increase dividends
| to return value, rather than fiddle with share prices.
|
| but, yeah, agreed to your general observation.
| twoodfin wrote:
| Why should any seller have to justify their prices? Just
| don't buy their policy, buy someone else's.
| cool_dude85 wrote:
| Insurance in general is more heavily regulated than this.
| There are a few reasons: because society doesn't want
| these companies racing to the bottom on price and leaving
| their customers high and dry when the catastrophe does
| hit, because society finds insurance pricing based on
| certain personal aspects, such as race, odious, and
| because the government mandates some types of coverage
| and they don't want to let insurers rinse customers that
| are forced to buy their product.
|
| For all these reasons, insurers typically must justify
| rate increases.
| twoodfin wrote:
| While it's certainly accurate insurance is a regulated
| industry, nothing you listed explains why it's a _good
| idea_ to allow government to set or approve rates vs.
| ameliorating those social concerns through other means.
| 20after4 wrote:
| Because insurance isn't optional. If the law demands
| insurance then the law must assure equal access to the
| legally mandated insurance.
| margalabargala wrote:
| What I saw was "supply chain got more expensive so $/claim
| went up and is outpacing premiums".
| HeatrayEnjoyer wrote:
| Many industries are regulated and have to provide good
| faith justifications for price increases. The burden of
| proof is on them, not the service recipient.
| brogrammernot wrote:
| I'm not sure you read my post then as it explains I've
| seen first-hand actual loss data because of supply chain
| & other costs leading to an unprofitable offering being
| denied by the state without any valid rationale other
| than "he didn't see any cars outside his window".
|
| The point is that regulators have not been allowing rate
| increases with good faith justifications for years and
| now that they see their actions have caused companies to
| pull out they're pointing the finger at the companies
| when it's their poor judgment for years coming to
| fruition.
| rufus_foreman wrote:
| I'm seeing it: "This was with actual data of losses
| increasing due to supply chain disruption of auto parts,
| labor increases and many more things."
| Ekaros wrote:
| Value of claims going up while number might be slightly
| down... Means that outgoing money that is returned to
| buyers has increased. They are "winning". But house cannot
| keep losing or they go bankrupt.
| myself248 wrote:
| I thought risk pooling was the point?
| brogrammernot wrote:
| It is through reinsurance mechanisms and the way you build
| the portfolio.
|
| If you can't use predictive attributes, many not allowed in
| California, you're not going to get reinsurance interest
| because you can't really balance the risk across different
| risk types for drivers.
|
| So the end result is the customer pays more, despite their
| driving record being clean, because that's the only way to
| manage through the risk.
| ska wrote:
| Risk pooling is fundamental to insurance, but not all pools
| are the same.
|
| The observation is that if you aren't able to discriminate
| at all or subdivide the pools, the only response is to up
| the average rate to cover the aggregate risk as best you
| can estimate it. This gets tricky if your ability to change
| rates is constrained, also.
|
| These things are always in fundamental tension, and also in
| tension with privacy. It's not an easy problem.
| brogrammernot wrote:
| Yup, exactly.
|
| Even worse for the consumer is that insurance rules say
| you have to "offer" insurance in the state to get your
| license.
|
| Well, you don't want to drop your license but really
| don't want to have a bunch of policies. What do you do?
|
| You make it impossibly difficult to get insurance. I'm
| not going to name names but a lot of insurance companies
| in California are doing this.
|
| No online applications, have to call in, have to fax in
| or mail paperwork required and so on...
| hilux wrote:
| Yup - I have experienced this trying to buy health
| insurance (pre-Obamacare) in California.
|
| I was very confused until I realized they were doing
| exactly what you said.
| michael1999 wrote:
| That sounds like informal underwriting. If you are
| forbidden by law from better underwriting, then selecting
| by conscientiousness is a sensible proxy.
| ls612 wrote:
| In extreme cases forcing too much pooling can cause
| market failure. The intuition is that the least risky
| customers decline to purchase (much) insurance, making
| the average risk higher, increasing prices, making more
| people decline insurance, in a vicious cycle. It's
| fundamentally similar to Akerlof's market for lemons.
| brogrammernot wrote:
| This is always a fun topic for me.
|
| If everybody is sharing all the risk that's the same
| thing (obviously I'm being simplistic) as them
| underwriting the risk themselves.
| lazide wrote:
| They're opposites though?
|
| Someone underwriting their own risk might as well not
| have actual insurance, as they're just on the hook for
| actual damages correct?
|
| So if they get sued for $1M, then they are on the hook
| for $1M (as an individual).
|
| If everyone is sharing the risk, then everyone is on the
| hook for $1M/number of people.
|
| So the individual that gets sued for $1M in a large
| state, might only be on the hook for a couple cents for
| their own lawsuit. Though they'd also be in the hook to
| the same degree for some other asshole getting sued.
|
| Which is why insurance creates moral hazard (for things
| someone can control), and reduces catastrophic damage to
| individuals (for things someone cannot control).
| baronswindle wrote:
| It is...kind of. But we're talking about severely limiting
| the ability of insurers to distinguish high risk parties
| from low risk parties and price accordingly. When the
| insured parties have limited agency over the risk they
| present -- as with, e.g., health insurance for congenital
| diseases -- this kind of regulation can make sense. But
| when insured parties can control the risk, such regulation
| usually makes insurance markets much less efficient.
| Essentially, it takes away the incentive for insured
| parties to avoid risky behaviors, creating moral hazard.
| This is a well-understood mechanism for market failures.
| jeffbee wrote:
| We already have this problem with car insurance in
| California. In the 1980s, at the tail end of a long
| series of stupid initiative ballot measures, Californians
| wrote down that there are only 2 strata of risk: good
| drivers, and everyone else. "Good Driver" is defined as a
| person who has had a license for 3 years without killing
| or injuring anyone. Because of this, California is the
| only American state where the law requires that a middle-
| aged person who drives a base model Honda Fit, and a
| 19-year-old with a Dodge Hellcat who miraculously hasn't
| killed anyone, yet, that we know of, both get the same
| "discount". And consequently it is unlawful here to offer
| those telematics systems that charge less to good drivers
| and more to bad ones.
| brogrammernot wrote:
| Yup, I hated reviewing California based book of business.
|
| Everyone is upset their rate is going up but the issue is
| lack of ability to use predictive underwriting because of
| what you said and more.
| tptacek wrote:
| You want to risk pool a specific cohort of people. You want
| the pool to be as large as possible without masking clear
| adverse indicators. For instance, from an example
| downthread: you probably don't want to pool people with
| trampolines in with everybody else. Most people don't have
| trampolines. To an insurer, the sole function of a
| trampoline is to generate lawsuits. If you pool
| trampoliners together with everybody else, you necessarily
| raise everybody's rates to subsidize trampoline lawsuits.
| Better to factor the trampolines out and price them
| directly.
| AnthonyMouse wrote:
| > I thought risk pooling was the point?
|
| The point is pooling _unpredictable_ risk. You don 't know
| ahead of time if your house is going to flood. You do know
| ahead of time if your house is on a flood plane. Therefore,
| people with houses on a flood plane pay more for flood
| insurance.
|
| The alternative is that low risk customers can't get
| insurance because they'd have to pay the same as high risk
| customers and that isn't worth it. Additionally, then
| people build tons of houses in extremely high risk areas
| because they can buy insurance for the same price as
| someone not doing something stupid, which is a moral
| hazard. Existing regulations have already caused this to
| happen in many cases.
| Terr_ wrote:
| > The point is pooling unpredictable risk.
|
| This is important point about knowledge which I feel
| leads towards _another_ kind of hazard: _Which party_ is
| capable of predicting risk and how that information
| asymmetry may be exploited.
|
| We already spend a lot of time thinking about one
| direction, where the insured hides a pre-existing
| condition or their nefarious plan to commit arson, or
| whatever.
|
| But what about the other direction? What about when the
| insurer has tools and relationships to determine
| something but doesn't tell the insured?
|
| That might either be because there's not enough
| competitive pressure to make them lower the premium, or
| perhaps they raised the premium to cover the higher risk
| but refuse to disclose exactly what the risk is or how
| they determined it.
| AnthonyMouse wrote:
| That is the problem solved by competition. If insurers
| know that your risk is below average then they'll want
| your business and therefore want to underbid other
| insurers in order to get it. But so will the other
| insurers, until your premium comes down to reflect your
| risk. This works even if you don't know your own risk
| because all you have to do is pick the most attractive
| price.
|
| Of course, if you don't have enough competition that
| doesn't work, but then your problem is that you don't
| have enough competition. Which, especially in insurance
| markets, is generally caused by regulatory barriers.
| zamfi wrote:
| > is on a flood plane.
|
| You mean like this one?
| https://www.yahoo.com/news/united-airlines-flight-
| diverted-t...
|
| ...I'll see myself out.
| trogdor wrote:
| Why are insurance rates regulated by the government?
|
| I understand that the state has a strong interest in ensuring
| that insurance companies are adequately capitalized, but I
| don't understand the state interest in directly regulating
| premium prices. (Or is that not what you are referring to?)
| gumby wrote:
| For the same reason credit card interest rates are
| regulated: there's an asymmetry in bargaining power.
|
| Car prices are not regulated because there are plenty of
| options for the consumer.
| AnthonyMouse wrote:
| If there is such an asymmetry in bargaining power then
| why do most people pay less than the statutory maximum?
| If there are multiple insurance companies, how is it not
| the consumer who has the bargaining power, since they can
| just take the lowest price?
|
| The actual reason is that some consumers are extremely
| high risk, the market rate for those consumers is
| correspondingly extreme, and then they whine to
| legislators that they're getting ripped off when in fact
| the rate reflects the risk. And then the company either
| refuses their business if they're allowed to or raises
| rates on everybody else to compensate if they're not.
| lazide wrote:
| Eh, or without regulation when people switch risk
| categories due to a loss they get completely screwed
| because no company will insure them anymore. At which
| point, there is strong incentive to only claim the most
| outrageously bad losses, and for people to only actually
| get insurance if they have real reason to suspect a loss
| that is non obvious to others.
|
| It's a market type that is fundamentally messy and prone
| to abusive behavior by both sides.
| AnthonyMouse wrote:
| > Eh, or without regulation when people switch risk
| categories due to a loss they get completely screwed
| because no company will insure them anymore.
|
| This only happens when regulations cap premiums, because
| otherwise there is always a rate at which selling
| insurance is profitable. Even if you have a 50% risk of a
| claim (extremely high), you'd still be able to buy
| $100,000 in insurance for a little over $50,000. Of
| course, you may not be able to afford this, but then
| maybe if your risk is that high you should just refrain
| from engaging in that activity eh?
|
| > At which point, there is strong incentive to only claim
| the most outrageously bad losses
|
| That's what insurance is _for_. If you have a 20% chance
| of losing $100 every year, you don 't need to pay
| $21/year for an insurance policy, you just lose $100 once
| every five years.
|
| > and for people to only actually get insurance if they
| have real reason to suspect a loss that is non obvious to
| others.
|
| The reason to get insurance is if there is a low
| probability high cost risk, like a house fire. You don't
| expect it to happen, but it could, and you'd rather pay
| $1000/year, have it and not need it, than lose the value
| of your house in the event of a random accident.
| dan-robertson wrote:
| I thought there were also requirements that insurance
| rates are profitable (in expected value) to prevent some
| loss-making customer acquisition strategies and to reduce
| some long-term risks from insurers going bust. I'm not
| very confident in this claim.
| brogrammernot wrote:
| Yes but less so on the rates themselves & rather do you
| have enough cash to stay alive without going under.
|
| They're obviously related but less regulatory focus on
| rates, more on cost of business and that.
|
| Edit: Basically you can run at a loss (most do) for a
| limited period of time but have to show that you will be
| liquid on the other side of the losses.
| brewdad wrote:
| More than that, you can choose to go without a credit
| card. Insurance is mandatory for most people. Either the
| law requires it or a lender requires it in order to
| approve the loan.
|
| Insurance rates are regulated for the same reason most
| states regulate utility rates. You can't really opt out
| and the markets where price regulations have been removed
| have left most consumers worse off.
| TylerE wrote:
| That's not really true anymore. Try booking a hotel or a
| flight without a cc.
| neilv wrote:
| Why is basic insurance for ordinary people a for-profit
| business at all, rather than something the collective
| (administered by the state) does to soften any misfortune
| that hits any of its members?
| AnthonyMouse wrote:
| Because state insurance programs have perverse
| incentives. Insurance itself is a moral hazard. You buy
| insurance and then do something risky you wouldn't
| otherwise have done because if it goes wrong you're
| insured. It's also an opportunity for outright fraud. If
| the book value of your property is higher than its true
| value, you carry insurance and then set a fire.
|
| Private insurers have the incentive to price this in. If
| they can predict you're going to be high risk, or uncover
| evidence of arson, they can charge you higher rates or
| refuse coverage. For state insurers the cost goes on the
| taxpayer and if claims are refused for legitimate
| reasons, the perpetrators go to the media and accuse the
| state of bankrupting their family. This puts pressure on
| elected officials to shift the burden of this fraud onto
| the taxpayer, whereas private insurers would push back
| because they have a direct financial incentive not to eat
| the cost of fraud and mispriced risk.
| Hendrikto wrote:
| Because Americans hate that idea and call it socialism.
| mopenstein wrote:
| Very few people hate having insurance in case of
| accidents but a lot of people hate having guns stuck in
| their back and told to pay up for other people.
|
| I pay a rate based on my risk factors which I actively
| work to maintain as low as possible. I don't want to be
| forced to pay for every reckless idiot in my country (of
| which there are too many to count).
|
| But I also hate non-voluntary anything, so I'm weird.
| forgetfreeman wrote:
| And without exception the folks fixated on the notion
| they're paying the way for someone else fail to grasp, on
| the most fundamental level, the notion of a public good.
| There are days where I think it'd be amusing to suspend
| federal and state law in the Dakotas just to see how long
| it took before regional warlords took over.
| TylerE wrote:
| Those reckless idiots destroy your property so you're
| paying for them anyway.
| jdhzzz wrote:
| Right on both counts
| NeoTar wrote:
| In some places and markets it is - I believe if you live
| in British Columbia basic vehicle insurance is done
| through the province.
|
| https://en.wikipedia.org/wiki/Insurance_Corporation_of_Br
| iti...
| username332211 wrote:
| If you do that, you must also regulate the sort of
| vehicles ordinary people can buy and the sort of homes
| they can own.
|
| After all, we can't have the community suffer an
| unsustainable loss because some guy earned too much money
| and selfishly bought a Camaro.
|
| So, obviously the collective should create a list of
| cheap and economical cars ordinary people are allowed to
| buy.
|
| If that doesn't feel right to you, remember, the so
| called "freedom of choice" is a bourgeois value.
| Transcend it.
| zen928 wrote:
| > you must also regulate the sort of vehicles ordinary
| people can buy and the sort of homes they can own.
|
| Yep, we already do that. Vehicles and houses have to
| conform to a set of standards that provide security and
| safety measures for others, e.g. "Street legal" car
| restrictions, fire hazard safety requirements and
| building permit regulations and state codes that adhere
| to city guidelines, etc. Might need to include a few more
| talking points from the political pundit you're
| regurgitating views from for a better argument.
| cortesoft wrote:
| Even if the government ran the insurance program, you
| wouldn't be forced to charge everyone the same amount for
| their insurance. The Camaro driver could pay more for
| their coverage.
| Kon-Peki wrote:
| > Why is basic insurance for ordinary people a for-profit
| business at all, rather than something the collective...
|
| There are mutual insurance companies [1], including the
| largest insurance company in the US (State Farm). At the
| end of every year, if the amount of money left over
| exceeds the formula they have set, every policyholder
| gets a refund.
|
| [1] https://en.wikipedia.org/wiki/Mutual_insurance
| tomp wrote:
| Mathematically, if you sell insurance at break even,
| you're guaranteed to go bankrupt - on an infinite time
| scale, the "spike" of a random walk martingale (this last
| word means, it doesn't make a profit) will exceed every
| level, i.e. it will wipe out any amount of collateral /
| capital / equity the company might have.
|
| https://en.wikipedia.org/wiki/Law_of_the_iterated_logarit
| hm
| cortesoft wrote:
| This is why you have re-insurance
|
| https://en.wikipedia.org/wiki/Reinsurance
|
| If the final insurer is the government, you don't have
| the risk of ruin because you have control of the money
| printer.
| TylerE wrote:
| If money printer goes brr... you're losing, not winning.
| nichohel wrote:
| Also, fraud.
| username332211 wrote:
| There are votes in it.
|
| Or, to be precise, the benefits are concrete go to precise
| groups of people, the costs are abstract and diffuse. Same
| thing as protective tariffs.
| _tom_ wrote:
| Votes are the sort term answer. People are losing their
| houses in Florida. Mortgages require insurance, and if
| you insurance goes up thousand a year, and hundreds a
| month, some people can't afford it, and lose their
| houses.
|
| Longer term, this is bad for a society in general, and
| politicians do know this.
|
| There are all sorts of potential societal consequences to
| people losing homes that cost the society (us!) money
| (homelessness, vandalism, entire neighborhoods going the
| way of Detroit suburbs, and much, much more). Society
| doesn't want this to happen.
| vundercind wrote:
| Ten-to-one you can go back to when the regulation started
| and find there was rampant, blatant abuse going on. That's
| the usual story behind these kinds of things.
| jfengel wrote:
| There is a saying that regulations are written in blood.
|
| They may not have been well designed, or they may not
| wear well. But most of the time they are put in place
| because somebody got badly hurt, one way or another.
|
| Industry could usually design itself better regulation.
| But unless it finds a way to mutually enforce compliance,
| the task will fall to government.
| DSMan195276 wrote:
| Every state requires you to hold some minimum level of car
| insurance, mortgages require a level of homeowners
| insurance, etc. The underlying problem is that it's a
| significant barrier for people if they get priced out of
| the market (even if it's for good reason). If you can't
| afford car insurance or no insurers will offer it to you
| then you legally cannot drive a car, and in the US that
| becomes a problem that spirals into bigger problems.
|
| I would say overall there's no good answer to this problem
| that everybody would be happy with, just maybe one you
| consider "less bad" than the other ones.
| sokoloff wrote:
| While there's a lot I dislike about the Mass auto
| insurance rules, the rules for "no insurance company will
| voluntarily insure you" are pretty friendly to drivers
| who are otherwise uninsurable.
|
| https://www.mass.gov/info-details/massachusetts-auto-
| insuran...
| wbl wrote:
| If you are such a risk when driving no insurer will touch
| you, I would like you off the road.
| bobthepanda wrote:
| In practice what actually happens is that these people
| will drive anyways and cause damage before being pulled
| over, except now they have no insurance and it's a whole
| mess.
|
| It is also the theory behind universal healthcare
| coverage, because people will have medical issues that
| eventually end them in the ER regardless of coverage
| status and someone has to get paid for services rendered.
| And also insurers will literally take any excuse to deny
| coverage if they can.
| earthling8118 wrote:
| I'd prefer that nearly all of us were off the road, but
| in practice we've not built a world that allows such a
| lifestyle.
| brogrammernot wrote:
| Premiums is what I'm referencing, yeah.
|
| So, it's a complex thing but the state has a vested
| interest in drivers being insured because of state /
| federal funding for roads, infrastructure and all of that.
|
| The original intent was to stop humans from being greedy
| assholes and to provide a stick for when they messed up.
| Without the states involvement, insurance would likely go
| the way of used auto with "buy here pay here" lots which is
| a net negative for the state & society as a whole.
|
| They want to make sure that "fair" prices are set so that
| there isn't an overly disproportionate amount of people who
| need the insurance not having insurance. In reality, the
| less risky drivers do for all intents and purposes help
| off-set the cost of the more risky people but all of that
| is hidden in the premium logic.
|
| At the end of the day, what has happened though is the
| state's regulatory group overstepping their bounds (in my
| opinion) and ignoring good faith proposals with data
| showing why rate increases are needed which leads to
| situations we're in now.
|
| Having been in that world (I left it) I can honestly say
| there has to be some regulations or regulatory body because
| a lot of these folks spend so much time looking at numbers
| (actuarial science in general) they forget the fact there
| are humans behind those numbers.
| Vic-Bhatia wrote:
| Hi, This is a very informative post. I am trying to learn
| more about how the insurance industry works. Would you be
| open to sharing any resources (websites, books etc) that
| teach the 0 to 1 of insurance? Or can I DM you with a couple
| of questions? Thanks!
| brogrammernot wrote:
| Yeah, sure shoot me a DM and when I'm back later at my
| computer I have some.
|
| I didn't deal much on commercial insurance btw, I have
| _some_ awareness of that.
| lm411 wrote:
| Here in British Columbia, our provincially owned insurer
| (ICBC) saved significant money because of fewer claims during
| Covid. They even issued a rebate to most drivers. Though they
| also noted losing some revenue due to fewer or lower premiums
| being paid. The amount saved was far greater.
|
| https://assets.ctfassets.net/nnc41duedoho/BNR4qtOTGPJuyQADtK.
| ..
|
| I wonder if the difference was largely because of Canada's
| more strict lock downs. The roads were nearly dead here for
| quite awhile.
| Scoundreller wrote:
| And Canadian auto-parts prices are through the roof anyway.
| If there's a factory-gate price increase/supply issue,
| there's room for margin compression instead of raising
| prices. Maybe?
| stalfosknight wrote:
| And yet there's seems to always been enough money for stock
| buybacks and disgustingly excessive executive compensation.
| Analemma_ wrote:
| I'm not usually a "actually this is the fault of regulation"
| sort of person, but in this case it really is the fault of
| regulation. A bunch of states have laws saying premiums can't
| rise more than X% in a year, or can't rise at all without the
| approval of the state insurance commissioner. If circumstances
| have changed (e.g. wildfire or hurricane risk is now worse than
| we thought, and also labor market tightness and inflation means
| repairing/rebuilding is much more expensive) such that the
| insurance company can't insure you profitably without a rate
| hike they're forbidden to do, then of course they're going to
| drop your policy.
| epolanski wrote:
| Nobody can be forced to insure you if they don't want to. I
| learned that on CNBC the other day, here's the segment talking
| about the state of home insurance in US.
|
| https://www.youtube.com/watch?v=xw8fpEpwMzA
| Waterluvian wrote:
| Can't really force people to do business like that...
|
| What you can do, which the U.S. already does, is government-run
| insurance, socializing the losses among a population. Flood
| insurance, for example.
| throwaway74432 wrote:
| Related, my vehicle insurer keeps jacking up the rates. I've
| never been in an accident or had a ticket, and I drive 2000 miles
| per year. But every year up up up. Then they offer I install a
| tracking device on my car to get my rates back down to a
| reasonable amount. There seems to be a pattern of insurers
| wanting to know everything about everyone, and using irrationally
| higher rates to coerce consent. And I have to pay it or consent
| to tracking because insurance is mandated by law.
| p1esk wrote:
| My insurer jacks up the rate even with the tracking device. The
| rate more than doubled in the last 3 years.
| gjsman-1000 wrote:
| One of us needs to win a lottery; and force (er, strongly
| incentivize) Congress to pass a law banning the lowering of
| insurance prices based on tracking devices.
| aesh2Xa1 wrote:
| Car manufacturers are building telemetry into the vehicle,
| which they can sell directly to insurance companies. If you buy
| such a car, your insurer doesn't need you to install anything.
|
| https://www.nytimes.com/2024/03/11/technology/carmakers-driv...
|
| My opinion is that the opt-in hardware might have afforded you
| some discount, maybe. I doubt the same is true for the
| manufacturer-insurer relationship. I think that pattern is
| probably more likely to establish a higher baseline for all
| drivers, and the presence of data can only ever (1) maintain
| the baseline or (2) harm you.
| syndicatedjelly wrote:
| Maybe the rise in the prices of new cars, used parts, and labor
| has an impact.
| xyst wrote:
| that's because the insurance model is not based on individual
| performance but based on a collection of data points.
|
| Insurance will jack up the renewal rates for everyone because
| there are increased number of accidents in your zip code or
| area. Cars are more expensive now. Often adjusters just declare
| vehicles no longer worth the repair. Some vehicles if they get
| dented will result in a shit ton of work to get it repaired
| (ie, Rivian truck).
|
| You are paying for the insurance companies increased risk
| because the people around you can't drive worth shit.
|
| Got to love car centric transportation ...
| giantrobot wrote:
| > You are paying for the insurance companies increased risk
| because the people around you can't drive worth shit.
|
| Insurance companies are supposed to be creating risk pools.
| If everyone in my zip code drives like shit the insurance
| company should be splitting them up into pools with better
| drivers from other areas. There's no reason at all to pool
| everyone geographically. If the insurance company can't
| manage risk pools they're fucking up.
| supertrope wrote:
| You can lobby your politicians to mandate coarser rating
| territories. This will ironically increase premiums more
| than they otherwise would be. Just like banning credit,
| gender, homeownership, occupation, etc.
| jjtheblunt wrote:
| You're free to change insurance companies, aren't you?
| burntwater wrote:
| They're ALL raising rates. You might be able to change to a
| cheaper one this year, but next year your cheaper company
| will have implemented a 20%+ increase.
| nmeagent wrote:
| You're also free to find companies whose contracts don't have
| binding arbitration clauses. Good luck.
| ska wrote:
| repair cost goes up, up, up on average -> insurance goes up,
| up, up.
|
| That may only be part of it, but it's definitely part of it.
| rchaud wrote:
| > There seems to be a pattern of insurers wanting to know
| everything about everyone
|
| I see an exciting new revenue stream in their future.
| Bostonian wrote:
| Insurers telling you how to reduce the risk of accidents and
| property damage is a good thing.
| bastawhiz wrote:
| The article literally opens with a story of an insurer dropping
| a homeowner for having a roof that's too old with no recourse,
| even when a third party expert said the roof is good for
| another decade.
|
| > The red-flagged images are providing insurers with ammunition
| for nonrenewal notices nationwide.
|
| I don't think your comment is wrong, but it's not
| representative of the problem the article is bringing up.
| time0ut wrote:
| Insurance is a borderline scam. You have to have it by law or in
| case the worst happens. When the worst does happen get ready for
| a fight as they will do everything they can legally do to wriggle
| out.
| dmoy wrote:
| You don't have to have home insurance by law, at least not in
| the US
|
| If you don't own your house outright, the bank that owns part
| of it may require insurance as a prerequisite for loaning you
| money.
| mindslight wrote:
| You're right about the ultimate legal situation, but there's
| two problems I see with dropping insurance on a paid off
| home. The first is that the companies, seemingly operating in
| lock step, will heavily penalize you if you change your mind
| and want to go back to insuring. The second is the liability
| component, whereby simply owning a piece of real estate means
| you're a juicy target to be found jointly liable for a whole
| host of things that most people would consider unreasonable -
| eg someone trespasses, injures themselves, and then sues you.
|
| I've long said that one major threat that "regular people"
| would suffer from the consumer surveillance industry was
| going to be insurance (another being fine-grained price
| discrimination). It looks like both are really starting to
| come into swing. The best time for US privacy legislation
| (including something analogous to the GDPR) was 20 years ago,
| the second best time is now.
| dmoy wrote:
| > The first... The second
|
| Sure, but neither of those are due to it being required by
| law.
|
| In the first case there I don't know what's happening, I
| guess maybe insurance companies have figured out that
| people dropping insurance and then picking it back up
| correlates with increased claims due to stuff that happened
| during the interim.
|
| In the second case there, you can definitely get liability
| insurance separately from homeowners. And it's wayyyy
| cheaper. Or, live in a country that isn't as crazy
| litigious as e.g. USA.
|
| But again, neither is a legal requirement, which is all I
| was getting at initially given the top comment in this
| chain.
| tptacek wrote:
| I have never valued insurance more than the moment at which
| I owned my house outright. If you're so financially secure
| that the loss of an asset that large is manageable, I sort
| of don't much care about what you think about insurance
| rates?
| mindslight wrote:
| Apparently in your book anybody that isn't _effectively
| negative_ on assets (everyone needs a place to live) is
| so rich they 're not entitled to an opinion on insurance
| rates? This kind of weird aggro-dismissal seems like an
| inevitable result of "privilege" politics based around
| dragging everyone down to the lowest level. Having a
| place to live where one isn't burning heaps of money on
| rent should be our _expected societal baseline_ , not
| some exceptional thing to be attacked.
|
| But back to the topic - a total catastrophic structure
| loss would indeed be a problem. But from what I've seen,
| most insurance claims are not for total losses but rather
| things like water leaks and roof damage that have much
| higher sticker prices than what it actually costs to
| maintain/triage/mitigate/calmly repair. I've known people
| that have submitted claims for ice dams, oil burner
| blowbacks, new roofs ("wind damage"), finished basement
| water damage, etc. I will never submit an insurance claim
| for those type of things, and so it makes sense to at
| least _consider_ self insuring, especially when rates are
| doubling every few years.
| tptacek wrote:
| You can have whatever opinion you'd like about insurance
| rates, but if insurers are sustainably incurring losses,
| rates have to go up, one way or the other: either
| insurers raise their rates, or they exit the market,
| decreasing competition and raising rates.
|
| There's no way to moralize out of this!
|
| Regarding minor claims: I think what I've learned about
| homeowners insurance is: don't make minor claims. That's
| not what the product is for. Homeowners insurance (1)
| protects you from total loss of your primary asset (ie,
| from fire) and (2) protects you from being bankrupted by
| lawsuits. If you use it to repair leaks, you're going to
| take a bath.
|
| Have you applied for a homeowners policy recently?
| Literally one of the first questions insurers ask is:
| "have you made homeowners insurance claims?".
| mindslight wrote:
| I didn't try to "moralize out of this", apart from the
| condemnation of many types of personal liability people
| will find themselves on the receiving end of based on
| simply owning real estate? That could certainly stand to
| be reformed, but the criticism is aimed at the prevailing
| laws rather than the insurance companies for working with
| them.
|
| Personally my gripe is that I wish insurance companies
| would update what are seemingly quite obtuse pricing
| models, rather than pushing customers into invasive
| surveillance tech. For example I'd appreciate if it were
| possible to raise my deductibles by an order of magnitude
| and see a meaningful drop in premiums. But instead it
| seems like the only coverage knob that has an effect is
| the max coverage limit (which when you think about it,
| actually shouldn't even be a thing. the whole point of
| insurance is to cover the long tail risk). My gripe is a
| little more pronounced for auto, where I quoted out
| dropping the miles driven on one vehicle to nearly zero
| and it reduced premium by a mere 10%.
|
| Re minor claims, maybe I'm underestimating how much
| future premiums went up after those somewhat frivolous
| homeowners claims I mentioned, and they effectively just
| ended up forming loans rather than affecting the overall
| expected value of losses.
| wincy wrote:
| My uncle didn't have insurance for a house he'd paid off. An
| arsonist burned it down six months later and then he
| proceeded to get letters from the city telling him to mow his
| lawn for the next ten years.
| dylan604 wrote:
| Just because you don't have a livable structure on the
| property means the property is exempt from any of the
| property regulations. What a weird rant.
| bvan wrote:
| Without insurance, we'd be living in much different
| circumstances. Just consider parts of the world where insurance
| is just not available to much of the population.
| overstay8930 wrote:
| If it's a scam then don't buy it. Pay cash for everything and
| put up a bond with your state, you don't even need car
| insurance at that point.
| kevin_thibedeau wrote:
| You don't have to have home insurance if you own the home.
| gjsman-1000 wrote:
| 5 years ago, a family friend got an angry letter from the city
| because he had cleared slightly too much lakefront weeds (and by
| slightly - I mean very lightly, enough to anger the algorithm
| lightly). How did they know? Drone. And this was suburban
| Minnesota.
|
| Not even insurance - this was the city of Newport on a power
| rampage. Turns out there's also no shortage of general corruption
| in the police department...
|
| https://bringmethenews.com/minnesota-news/footage-shows-newp...
| dylan604 wrote:
| rules are rules. you complaining about this is like football
| fans complaining about the tight offside calls.
| gjsman-1000 wrote:
| Imagine if I put cameras all over a city that charged you $10
| every time you exceeded the speed limit by 1 MPH. With an
| additional $10 fee for each additional MPH measure over the
| limit. Also, this is per camera, so if you pass 6 cameras on
| your commute going 70 in a 65, you're getting a $300 penalty.
|
| Rules are rules.
| dylan604 wrote:
| ahhh, see, there's a fatal flaw in your premise. I don't
| own a car, so this would never affect me. So, yes, rules
| are rules.
| CubsFan1060 wrote:
| I'm not sure how exactly you're drawing that parallel, but,
| IMHO, that would be just fine. I suspect people would speed
| a lot less.
| Ekaros wrote:
| Hmm, works like this in many places. That is 6 different
| infractions. Probably also means suspended license.
| t0mas88 wrote:
| You're quite accurately describing traffic enforcement in
| Switzerland and recently larger Belgian cities.
| hilux wrote:
| What does drones detecting weeds have to do with "general
| corruption"?
|
| If anything, overzealous adherence to the letter of the law,
| while annoying, seems the exact opposite of "corruption."
| denton-scratch wrote:
| https://archive.ph/SSXdN
| gmd63 wrote:
| Insurance bothers me for a few reasons:
|
| 1. What pisses me off more than anything else, it enables fraud
| that otherwise wouldn't exist. People manufacturing calamities
| and then claiming insurance allows dishonest people to get ahead
| in life over people who are honest and concerned enough about the
| future to buy insurance. Additionally, insurance fraud is net bad
| relative to other types of fraud because it encourages criminals
| to manufacture damage that wouldn't otherwise happen.
|
| 2. There is an obvious incentive for them to chase an endgame of
| knowing exactly whether you will cost them money or make them
| money. When they attain this, insurance simply becomes a fortune
| teller and an instruction manual for Living Without Calamity. If
| you're denied coverage, you're going to experience something
| calamitous. If you're accepted, you have the ability to be fine
| and don't need insurance, unless you aren't sure how to Live
| Without Calamity. When you are accepted, you're only covered if
| you surrender your agency and follow their instructions for
| Living Without Calamity. Basic things like travelers insurance
| have clauses that void your policy if you scuba dive past 30 feet
| on your trip.
|
| 3. Insurance policies can create toxic incentives for people that
| hurt society. I filed a claim with Generali travel insurance
| because my host tested positive for COVID with a take home test,
| and I canceled my trip. Their web portal indicated that my claim
| had been received and was awaiting processing. I called
| incessantly to confirm my claim was good, and was not able to get
| an answer after several calls that routed through incompetent-by-
| design help desk employees and into a voicemailbox of a claims
| processor. Weeks go by and I receive a voicemail from the person
| I had been trying to contact telling me that I needed a doctor's
| note confirming that the person had COVID, and a take home test
| would not suffice. So, a company allegedly tasked with helping
| the public live safely wanted me to, at the time, ask my COVID
| infected host to waltz in to the doctor's office and spread
| around a pathogen that could kill patients. Nice. I guess they
| weren't medical insurance so they didn't care. And of course no
| doctor would retroactively go back in time and confirm that a
| person was positive for a sickness after they had already
| recovered.
| nradov wrote:
| What did policy actually state around medical reasons for trip
| cancellation? I'm not aware of any insurers that would accept a
| home COVID-19 test to justify a claim since it isn't reliably
| tied to any particular patient.
| gmd63 wrote:
| They don't allow at home tests. That's my point. If I had
| wanted my claim to go through, I would have needed to tell my
| host, who at the time was infectious, to go have a doctor
| confirm it.
|
| So the price to defend against fraud--which, related to my
| point #1, is prevalent enough such that Generali has this
| policy--is to ask infected people to spread their sickness in
| doctors offices just so they can use doctors as tools to
| verify claims are legitimate.
|
| So yes, I should have read the policy, but I would not have
| asked my host to go into the doctor's office and spread COVID
| around just so I could get my legitimate claim processed. I
| just wouldn't have bought the policy in the first place.
| xcv123 wrote:
| The host can book a virtual appointment and get a doctors
| certificate online. It is easy and done in a few minutes.
| The insurer should have told you that.
| mk_stjames wrote:
| Regarding your situation in point #3, if your claim was of
| significant monetary value (I'm guessing $>2k) I think at that
| point I would have cited them some numbers from journal studies
| on take home tests showing sensitivity of such home tests as at
| least (78.9)[1] percent of a professionally administered PCR
| test and that by their actuary logic you should then at least
| receive at least 78.9% in return compensation of your total
| claim based on this data and if they otherwise refused a payout
| your follow up would be with a claims lawyer.
|
| I have no idea how that would play out but it seems like an
| interesting strategy to take.
|
| [1] https://pubmed.ncbi.nlm.nih.gov/34448871/
| xcv123 wrote:
| > So, a company allegedly tasked with helping the public live
| safely wanted me to, at the time, ask my COVID infected host to
| waltz in to the doctor's office and spread around a pathogen
| that could kill patients. Nice.
|
| No. That is done over the phone or video chat. Not required to
| physically attend a doctors appointment in order to obtain a
| doctors note for COVID infection. It's called telemedicine or
| virtual consultation.
| gmd63 wrote:
| Yes. Here's the actual covered event from the policy:
|
| "The Sickness, Injury or death of you, your Family Member,
| your Traveling Companion or your Service Animal. The Sickness
| or Injury must first commence while your coverage is in
| effect under the Policy, must require the in-person treatment
| by a Physician, and must be so disabling in the written
| opinion of a Physician as to prevent you from taking your
| Trip (either because your condition prevents your travel, or
| because your Family Member, Traveling Companion or your
| Service Animal requires your care);"
| xcv123 wrote:
| So if a doctor provides a written note they would reject
| that note because it was done through a virtual
| consultation? The doctors note should be sufficient and the
| fact that it was done virtually should be irrelevant and
| confidential. How is that legal?
| sys_64738 wrote:
| Even if you can't get insurance covering the roof, then ask for
| that to be an exclusion so you can get other insurance covering
| your home. Personal liability from lack of insurance can bankrupt
| you.
| steelframe wrote:
| I'm not sure the degree to which insurance companies are legally
| allowed to share information such as aerial photographs with each
| other.
|
| When I worked at Google I knew a developer who was building a
| prototype service similar to Google Flights, except for auto and
| home insurance. I don't think that product ever shipped.
|
| The dev on that team told me that a key thing they learned while
| doing the analysis is that the optimal strategy with auto and
| home insurance is to automatically switch providers whenever it's
| time to renew.
|
| It could be because your current company has collected things
| about you that they aren't allowed to share with other insurance
| companies.
| t0mas88 wrote:
| I think the most common reason is that insurance companies try
| to attract new customers with lower rates / discounts and
| welcome gifts. Switching every year means a new insurance
| company spends their acquisition money on you every year.
| CapmCrackaWaka wrote:
| Yeah, people like to think there's all kinds of grand
| conspiracies out there when it comes to insurance companies.
| But they're all actually very, very boring. All of these
| pricing algorithms are filed with the DOI, and are public.
| There is nothing crazy in them. The reason prices to go up at
| renewal is because that's just the optimal economics of
| insurance companies. Get you in at a competitive new business
| rate and then increase rates at renewal to offset the losses
| that new business policies incur.
|
| The product the OP is talking about made quite a buzz in the
| business when it was first released (I do think it came out
| for a while). It was a price comparison tool, and the reason
| it failed was because it was hard to get the big brand names
| on board. The big brand names didn't want to compete on price
| alone, because they spent so much money on their brand. They
| already had a ton of customers coming straight to their
| website.
|
| Sorry for any formatting or spelling issues here, I'm using
| voice to text.
| steelframe wrote:
| > But they're all actually very, very boring.
|
| In fact they're actuarially very, very boring!
| Symbiote wrote:
| https://www.comparethemarket.com/ is the best known comparison
| site for insurance in the UK.
|
| Is there not an equivalent in the USA?
| NewJazz wrote:
| Each state has its own market.
| bvan wrote:
| Insurance works on the basis of (a) quantifying risk and (b)
| charging fairly for the protection. In the long-term, getting
| better at (a) and consequently, (b), is in everybody's interest.
| For far too long, certain risk covers have been under-charged. At
| the end of the day, difficulty in finding affordable insurance,
| or any insurance at all, tells you something about the level of
| risk and the ability of insurers to charge appropriately for it.
| Regulators are often way behind the curve, to the detriment of
| insurers and consumers.
| rchaud wrote:
| If this were true, health insurers would have taken a cudgel to
| the US hospital system decades ago and come up with a more
| efficient system. They haven't because an opaque system allows
| them to maintain their own opaque practices.
| selectodude wrote:
| Health insurance companies don't care about what your doctor
| earns in the same way home insurance companies don't care
| about the cost of the roofer. They're going to price in
| whatever that cost may be and call it a day.
|
| Health insurance has it easier too because there's not really
| a concept of correlated risk in human populations. Most
| people do a decent job avoiding hurting themselves but when a
| flood comes, there's not a whole lot anybody can do.
| jenny91 wrote:
| COVID?
| chug wrote:
| Health insurance companies do actually care, unfortunately.
| They're incentivized to embrace higher prices since they
| have to spend at least 80% of premiums on payouts. If you
| have a fixed margin, well, you have to increase premiums to
| increase profit, so higher prices means more profit.
| knallfrosch wrote:
| Related:
|
| Climate change is coming for America's property market
| Insurance is supposed to signal risk. Policymakers should let
| it https://www.economist.com/leaders/2023/09/21/climate-
| change-...
|
| Parts of America are becoming uninsurable Blame growth in
| hazardous areas, climate change and bad policy
| https://www.economist.com/united-states/2023/09/21/parts-of-...
| _tom_ wrote:
| And (c) in the long term influence the risk. Insurance
| companies have long worked to improve auto safety. This
| benefits everyone. This needs to be applied to more significant
| risks, like fire flood and storm.
|
| I think we have to get much more serious about prevention.
| People are doing this:
|
| Fire safety:
|
| https://www.npr.org/2023/08/24/1195331310/red-roof-house-fir...
|
| Storm safety:
|
| https://abcnews.go.com/US/mexico-beach-home-survives-hurrica...
|
| We need to mandate this kind of building in new construction
| and modified construction.
|
| It may be worthwhile to subsidize this, to help with turning
| existing high risks into low risks.
|
| We need to be more severe on forbidding building in danger
| zones, and more accepting of insurers pricing these based on
| risk, so they don't have to leave the state, and others can be
| priced to more common levels of risk.
|
| We also need to not allow rebuilding in areas that will have
| these problems again, without some way of mitigating. We should
| not have to pay for someone's third house in a flood zone. But
| if you can make it flood proof after the first one, great.
| imgabe wrote:
| > This needs to be applied to more significant risks, like
| fire flood and storm.
|
| It is. The NFPA (National Fire Protection Agency) writes the
| National Electric Code and other safety codes that get
| adopted into law as building codes. It was started by a
| coalition of insurance agencies.
|
| https://en.wikipedia.org/wiki/National_Fire_Protection_Assoc.
| ..
| hilux wrote:
| On a similar theme [near-future consequences of data-driven
| technocracy], read the hilarious _Qualityland_, by Marc-Uwe
| Kling.
| jeffbee wrote:
| Auburn, California, is a mistake and should be uninsurable, and I
| don't want either my tax dollars or my insurance premiums being
| used to subsidize the treehouse lifestyle of exurban home owners.
| Whether this specific person's roof is rotted or not isn't really
| the point. Right now, the real estate sprawl industry is running
| their printing press at 110% design speed, trying to convince
| everyone that people who live on the fringes of civilization are
| getting a bad deal. But from where I sit, in a fireproof building
| downtown, I see it differently. We need a massive correction in
| California, under which we stop subsidizing the firefighting,
| insurance, and roads that serve the sprawl.
|
| The subject property, by the way:
| https://www.google.com/maps/place/2350+Buttes+View+Ln,+Aubur...
| s1gsegv wrote:
| I can understand feeling like both taxes and insurance premiums
| are too high, but the ability to make choices other than the
| specifically least risky one is one that fundamentally allows
| us to exercise our free will.
|
| Those in Auburn are, by the same idea, subsidizing windows that
| get smashed when parking downtown, or even if you walk, the
| extra risk that you are hurt by someone while walking in a
| place with more crime per square mile.
|
| You can live far away from a downtown and have to get your car
| smogged, because we wanted cars in the cities to provide for
| clean air.
|
| I don't mean we need to accept all risk in society, but for me
| there's a very worrying trend against ANY risk/cost that
| doesn't directly benefit the person advocating against it.
|
| Ultimately I know it comes back to the current economic
| situation, because if everyone feels like they're struggling
| there's less thought to care for others.
| dilyevsky wrote:
| The problem is not the sprawl, it's the out of control
| construction costs due to regulation and insurance premium caps
| due to... you guessed it - regulations
| perihelions wrote:
| Related idea:
|
| https://news.ycombinator.com/item?id=36268907 ( _" French tax
| officials use AI to spot 20k undeclared pools (2022)"_, 166
| comments)
| djha-skin wrote:
| I used to work for Verisk, an insurance tech holding company, who
| owned a company that took pictures of people's roofs using
| airplanes and special cameras. They got sued over a patent
| violation with EagleView[1], who claimed the tech idea as their
| own, and settled.
|
| > The strategic alliance allows customers seamless and integrated
| access to EagleView technology within Verisk's Xactware platform
|
| Xactware is a product that customers (read: insurance companies)
| use to figure out how much money to pay on a claim.
|
| The whole idea is to speed up the claims process. Insurance
| agents don't need to go out to people's houses to examine roof
| damage. But we also had a department doing some pretty
| sophisticated stuff around preventing claims fraud, so I'm not
| surprised.
|
| 1: https://www.verisk.com/company/newsroom/verisk-and-
| eagleview...
| 2four2 wrote:
| I recently started going through many big data collectors and
| expressing my rights to know, delete, and stop selling my
| information.
|
| Verisk makes the process notoriously difficult compared to
| other companies, you have to start an "ethics" report in their
| ticketing system
|
| https://secure.ethicspoint.com/domain/media/en/gui/69464/ind...
| passwordoops wrote:
| Is there a list of companies out there you can share, or are
| you going about it on your own?
| kristjansson wrote:
| Real question: is something like aerial photography of your
| roof really subject to privacy laws?
| Terr_ wrote:
| IANAL, but in the US, it depends on whether could have
| reasonably expected that their stuff was hidden. If your
| roof is sloped so that a person on the street could get the
| same information by walking around the block, then aerial
| surveillance is just a faster way to get that public
| observation.
|
| In contrast, if you set up a high fence around your pool in
| order to sunbathe naked, aerial photography would probably
| be an invasion of your privacy? If your roof was designed
| in a similar way, one might be able to argue it was wrong
| for the company to observe aspects of it without
| permission. (Although they might have gotten permission via
| the insurance contract...)
|
| I think this legal standard becomes tricky (or at least
| _ought_ to receive more scrutiny) when we start talking
| about pervasiveness and permanence. Just because I know
| that an arbitrary person might take a picture of me in
| public doesn 't mean I _expect_ every single thing I do
| outside to be recorded forever by a technological invisible
| stalker hovering over my shoulder at every outdoor moment.
| zdragnar wrote:
| Privacy in the US is defined as property rights, and your
| private property does not extend infinitely upwards into
| space. Anything over a certain high is public and
| regulated, and so if it is visible from above, it is not
| protected.
|
| Otherwise, it would be illegal to fly a plane or even a
| hot air balloon pretty much anywhere, and even things
| like google maps satellite view couldn't exist.
| organsnyder wrote:
| I work in privacy (as a dev, so the breadth of my knowledge
| isn't necessarily comprehensive), and to my knowledge
| there's no privacy regulations that would prevent this.
| Effectively, they're saying that the roof at a certain
| address is in a certain condition. I don't see how that
| could be considered personal data.
| NovemberWhiskey wrote:
| No.
| kbos87 wrote:
| I've thought about doing this myself and I wish there was a
| service that made it easier.
|
| The one thing in the back of my mind is also that there's a
| risk of this backfiring over time. When you are unknown to
| potential creditors, employers, etc in whatever platforms
| they choose to use to look you up, that's the ultimate sign
| of risk.
| brewdad wrote:
| Yes. Similar to being a young person trying to establish a
| credit history, if there is little to no info to go on
| companies will tend to assume the worst about your
| riskiness and charge accordingly.
| thelastgallon wrote:
| > I recently started going through many big data collectors
| and expressing my rights to know, delete, and stop selling my
| information.
|
| Can you share how to go about it? Do you have a blog post?
| westurner wrote:
| Did either of the parties move to invalidate the patent claims
| as obvious as, say, a camera on a stick or a toy airplane with
| a camera?
| contingencies wrote:
| So wattle-it-be... switch insurers, live underground, or plant
| trees? Wattles are fast-growing and there's plenty of choice.
| http://worldwidewattle.com/
| comprev wrote:
| Interesting to see this pop up on HN. I once did some work with a
| large international data broker who had recently acquired a
| company which specialised on aerial photography and ML for
| identifying potential insurance risks.
|
| I'm an infra guy by trade and really enjoyed learning about the
| tech while on their team. Mind blowing stuff to me!!
| jdhzzz wrote:
| Related (2010) on finding untaxed swimming pools on Long Island
| using Google Earth: https://www.nbcnewyork.com/news/local/heads-
| up-google-earth-...
| lamontcg wrote:
| > "If your roof is 20 years old and one hailstorm is going to
| take it off, you should pay more than somebody with a brand new
| roof,"
|
| If you've been paying for insurance for 20 years with one
| company, then I'd say that is certainly a dick move to drop you
| right before it might pay out. What even is the point then?
| Netcob wrote:
| The (lesser) dick move is also pitting customers against each
| other.
| rrr_oh_man wrote:
| Divide et impera. Works with insurance, social security, and
| third world countries.
| almostnormal wrote:
| Do car insurances pay the full price for crashed old cars? If
| roofs are designed with a similarly limited expected useful
| life lower payout would make sense like for cars?
| medion wrote:
| This aerial stuff now enhanced by AI is a privacy rights
| nightmare - in Australia, local councils are utilizing high res
| images shot by plane, which are AI analysed for infractions - ie.
| Illegal outbuildings, cut trees, earth works greater than a metre
| in depth, solar panels placed without auth etc. This kind of tech
| is going to be abused by both the private and public sector to no
| end. The images have a resolution to the point where veins on a
| tree leaf are perceptible.
|
| We are literally going to be monitored from the sky by AI for a
| lot of things, and from a legal standpoint at this stage there is
| nothing to stop anyone from doing it.
| killingtime74 wrote:
| (Am Australian lawyer) there's no privacy recognised in any of
| those things you're talking about. Simple solution is don't lie
| to insurers or the government.
|
| Of course we can elect politicians that change the law. Might
| be a hard sell if the motivation is to stop detection of
| illegal things.
|
| Sources: (no general right to privacy)
| https://en.m.wikipedia.org/wiki/Victoria_Park_Racing_%26_Rec...
|
| The Privacy Act (https://www.oaic.gov.au/privacy/privacy-
| legislation/the-priv...)
| medion wrote:
| Haha, by your reckoning why not monitor all comms for any
| lies? This is why we can't have nice things. We are walking
| into a new Robodebt scenario run by AI - it's all too much
| living in a constant state of surveillance and it's not a
| world I want to live in.
| killingtime74 wrote:
| I don't represent any view point on the law just telling
| you how it is. There's always multiple competing
| priorities. Ultimately not a politician so it doesn't
| really matter what I think.
|
| If we're talking morality I don't see how it's moral to ask
| the law to protect you from being found out doing the wrong
| thing. If these people don't pay their fair share the rest
| of us have to pay more.
|
| What if a law change prevents the government from enforcing
| environmental legislation from illegal land clearing or
| dumping? What if a farmer illegally diverts more water than
| they are allowed to from a river or with a well? It's not
| just about you and me but the whole country.
|
| On robodebt: that has nothing to do with privacy, tax
| records aren't private from the government? That's just bad
| tax enforcement.
| dontupvoteme wrote:
| Don't give aussies any ideas, they tried to make
| mathematics illegal. Sometimes they take the worst aspects
| of the british and americans and make it their own
| killingtime74 wrote:
| By far the worst thing we have is lack of protection on
| whistleblowers. There's multiple facing decades in jail
| right now. Even a change in governments didn't stop the
| prosecutions
| Nifty3929 wrote:
| This is not a technology or privacy problem - it's a
| legislative one. If it's illegal to do X, then it seems
| reasonable for the gov't to enforce that - the more efficiently
| the better. And if enforcing it seems wrong, then maybe it
| shouldn't be a law.
|
| For another toy example, what if speed laws in the US were
| fully enforced 100% of the time - they would be yanked
| immediately, because they are dumb and mostly just used to fund
| the police. We only tolerate them because they aren't enforced
| on us very often as individuals. It's like a medium-skill
| lottery to see who pays for the police.
| medion wrote:
| The technology is an enabler and it creeps into everything
| and before you know it we are where we are today.
| ahtihn wrote:
| > what if speed laws in the US were fully enforced 100% of
| the time - they would be yanked immediately, because they are
| dumb and mostly just used to fund the police
|
| Or maybe people would adjust their behavior and respect speed
| limits? Laws that are sporadically enforced at the discretion
| of police officers are awful. It just enables discrimination.
| tptacek wrote:
| I don't really understand the privacy concern here. To wit:
| insurers can demand _actual inspection_ of your home when making
| underwriting decisions. The condition of your house is very much
| their business. Why is an aerial photograph of your roof, which
| everybody in the world already has on Google Maps, such a big
| deal?
| worik wrote:
| The problem is the culling
|
| Insurance companies are very keen to get as much risk as
| possible off their books before the climate gets even more
| extreme in its volatility
|
| Good goes with bad, so long as the bad goes, some good going
| too is undesirable but OK because they are aware if the
| catastrophic climate events looming
|
| The insurance companies are behaving logically, probably
| legally IANAL, but for people who are simply caught in the wash
| it is unfair
|
| This is part of the huge systematic disruptions we are all
| going to have to adapt to, or die from, due to climate change
|
| Worrying times
| Nifty3929 wrote:
| Insurance companies are keen to align risks with premiums.
| The more accurately they do so, the less volatility they will
| have. And in the short run, probably more profit as well.
| This also helps consumers, where lower-risk folks will
| overpay less, and higher-risk folks will be required to lower
| their risk or contribute more in premiums.
| tptacek wrote:
| You (say) have a trampoline. I do not. We share an insurer.
| Our insurer asked, when you applied, if you had a trampoline.
| Your trampoline materially increases the risk that insurance
| is going to have to pay to cover a lawsuit on your property.
| You lied, and said you didn't. I am now paying to subsidize
| your trampoline.
|
| Why shouldn't I want them to be running drones over our
| houses? Worrying times... for pirate trampolines!
| RomanAlexander wrote:
| Wouldn't said trampoline simply not be covered by the
| policy since you lied about it? The agents are checking a
| box and the underwriter is sticking in a boilerplate
| "Customer said no trampoline therefore trampolines are
| excluded from this policy" text
| tptacek wrote:
| It depends on the policy, but either way, this is the
| kind of risk we're talking about managing with culls:
| trampolines, and bad roofs. I pay to keep my house up.
| You (say) don't. Why should I be OK with subsidizing your
| resulting claims with higher rates?
|
| I think there's a sort of weird subtext in the "risk
| pooling" discussions on this thread that "risk pooling"
| is a way for people who don't replace their old roofs to
| get protection from the people who do. But that's not at
| all the concept! You refusing you repair your roof isn't
| an act of god; it's just recklessness.
| NovemberWhiskey wrote:
| It's worse than that actually; say the liar's house burns
| down and the insurance adjuster finds the trampoline in
| the garden after the fact. As I understand it, the
| insurer can void the entire contract.
| tptacek wrote:
| I mean, the insurer in that case discovered that the
| client was defrauding them. If you steal $100 from
| someone's cash register, buy scratchy lotteries with it,
| win $200, and put the $100 back in the register, you're
| still a thief. That's the logic here: you gambled on a
| pirate trampoline and feel like you should have won.
|
| I don't know if it really is the case that your insurance
| can be voided over material misrepresentations unrelated
| to your claim, but certainly there's no moral argument
| that it shouldn't work that way.
| skissane wrote:
| It isn't always fraud or lying - you apply for insurance.
| Insurer asks you a million questions. One is "do you have
| a trampoline"? You honestly answer "No". The fine print
| of the application form says you have to tell them if at
| any time your answers change. After a while, you forget
| it even asked you about a trampoline. Then, you get your
| kid a trampoline. Per insurance fine print, you are
| suppose to inform the insurer of this change in
| circumstances immediately, but you've forgotten that.
|
| Also, it depends on the jurisdiction, but while the
| insurer can try to void the whole contract, courts don't
| always let them do it, especially if the policyholder
| convinces the court it was an innocent mistake or
| oversight rather than a deliberate lie.
| tptacek wrote:
| This is not a good example of "fine print", because
| trampolines are notorious sources of injury. It's like if
| you added a pool to your property and didn't tell your
| insurer because you "forgot the fine print". You can
| plead that, but if I was your neighbor, I'd be rooting
| for the insurer. Knowing about the dangers of things you
| set up on your property is on you.
| skissane wrote:
| We used to have a trampoline. We never once told our
| insurer about it. When I first applied for the insurance
| (at the same time we bought the house), I have no memory
| of being asked if we had one (we didn't at the time). I
| don't remember ever seeing that question from them,
| although I can't be completely certain it wasn't on some
| piece of paper and I didn't notice it. If they never ask,
| I'm under no obligation to tell them.
| tptacek wrote:
| Look, I hear you, but at some point this has to be on
| you. The CPSC has a thing dedicated to trampolines. The
| Mayo Clinic has articles about it. It is a huge cause of
| injuries of minors around the country. I'll grant that
| this is slightly more obscure an issue than swimming
| pools, but there are tons of swimming pool buyers who
| would make similar claims ("nobody told me swimming pools
| were that risky, this is just fine print mumbo jumbo"),
| and I don't think anyone here would entertain those.
| skissane wrote:
| Well, I'm not in America, and I'm wondering if this is an
| American thing?
|
| I just checked my insurance policy. The word "trampoline"
| never once occurs in it. I don't think my insurer cares
| about trampolines.
|
| If I think about it: given the absurdly large payouts for
| some injury lawsuits in the US, I understand why American
| insurers might be particularly sensitive to things that
| might induce injury, like trampolines. Given Australian
| courts tend to be much more modest in the damages they
| award, I can see why Australian insurers might not see
| them as something worth paying any special attention to.
| pxeboot wrote:
| > Wouldn't said trampoline simply not be covered by the
| policy since you lied about it?
|
| This doesn't stop expensive lawsuits, even if they
| ultimately don't pay the claim.
| wombatpm wrote:
| Insurance companies want money to come in and never go out.
| If they could they would sell life insurance to dead people
| and homeowners insurance to the homeless.
| tptacek wrote:
| The irony here is that's what insurance customers want,
| too: to incur arbitrary risks and have other more
| responsible customers pay for them.
| trogdor wrote:
| Businesses want to maximize profits, but an insurance
| company that doesn't pay claims will quickly have no
| customers.
| delfinom wrote:
| Lol my dude, trampolines in backyards being a rejection
| reason has nothing to do with climate change.
|
| Yes climate change has caused an upheaval in some
| geographical regions.
|
| But there are many economic forces at play, from the
| treatment of real estate as an investment making every home a
| million dollars to insurers all being reinsured by a ever
| smaller pool of reinsurers.
| sarchertech wrote:
| It's an issue of scale. Similar to police tracking phones.
| Police have always been able to assign an officer to follow a
| suspect, but it's expensive and therefore rarely done.
|
| If insurance companies can cheaply inspect everyone's house
| from space, the end result will be to lower prices for people
| with homes in perfect condition and raise them for everyone
| else.
|
| This is potentially problematic because the people with houses
| in poor condition are the least able to afford added costs in
| general.
| tptacek wrote:
| Why is it not a good thing if insurance is more accurately
| priced? Insurance isn't a redistribution mechanism. And
| dilapidated roofs aren't a social good. Municipalities have
| _actual_ redistribution schemes to make these kinds of
| repairs.
|
| I'll note that there's nothing at all redistributive about
| sneaking a trampoline onto your property, too.
|
| Further, I'll note that working class people also take pride
| in their houses and pay to keep them up, and they too are
| being asked to subsidize people who are getting rate breaks
| from false assessments.
|
| _Later_
|
| My municipality will make an interest-free loan of up to
| $25,000 to cover the kinds of property repairs we're
| discussing, if you're income-qualified (ie: not too rich to
| just pay to replace your own roof).
| drekipus wrote:
| Isn't insurance entirely a redistribution mechanism?
| tptacek wrote:
| Not in the sense evoked by customer purchasing power.
| compiler-guy wrote:
| No. It's a risk pooling mechanism.
|
| If a group of ten people all have a one in one-thousand
| per year chance of a million-dollar loss each year, then
| their annual premium will be:
|
| 10 x 0.001 x $1,000,000 = $10,000 (plus some
| administrative overhead and assuming a very basic risk
| model)
|
| It has nothing to do with who is rich and who is poor or
| making anyone come out ahead of their own losses.
| smodo wrote:
| Lol that's precisely what it is. It redistributes the cost
| of accidents. Across all its members, paid forward.
|
| Just don't get insurance and nothing of yours will pay for
| anything belonging to anybody else.
| tptacek wrote:
| No, it's not. The idea of a risk pool is that everyone's
| catastrophic risks cancel out, not that people who
| replace their roofs also chip in to cover hail and water
| damage for people who don't.
| rolandog wrote:
| Because everything is turned as a cash-grab by corporations
| and prices never go down.
| dgoldstein0 wrote:
| In some states insurance rates are regulated. Definitely
| know they are in California.
|
| That said whether the regulators are effective in keeping
| costs down is a different issue. But my not-very-deep
| understanding is that risks are rising, e.g. large
| wildfires in the US West, and increased hurricane
| frequency and strength on the Gulf Coast, and the only
| way to deal with that for the insurers is to raise
| prices, or drop customers - sometimes to the point of
| abandoning the market altogether. This sounds like
| another piece in that trend.
| sarchertech wrote:
| I'm not arguing what insurance should be I'm merely talking
| about the end result of this technology.
|
| I guarantee you income is correlated with state of home
| repair. If insurance companies can more easily access state
| of repair, lower income individuals will end up paying more
| than they did previously.
|
| Regardless of whether that is fair, it is a change from the
| status quo, and it's obvious why some people would consider
| that problematic.
| imgabe wrote:
| I think the issue is that in some cases the information is
| inaccurate and there are sometimes limited avenues for a
| customer to object if their insurance is cancelled based on
| inaccurate information.
|
| To the extent that the information is accurate, I agree. If you
| make an agreement with a company and buy insurance based on
| your statement that you don't have a pool, but then you do have
| a pool, I don't see any reason why we should be upset that you
| didn't get away with lying to the insurance company.
| tptacek wrote:
| They can generally decline coverage for any reason, for what
| it's worth; they could cancel without aerial footage just on
| the hunch that you didn't replace your roof, or they could
| mass-mail their customers demanding proof of roof
| replacements.
|
| (The article and other things I'm reading suggest that
| cancellations are because footage finds trampolines and pools
| --- in which case I don't even understand how anybody can
| have sympathy. It's fine to have insurance risks on your
| property! But disclose them!)
| londons_explore wrote:
| They can also use the info to decide if they allow a renewal.
|
| They can decide not to renew for any reason - including that
| they just decided not to do house insurance at all anymore.
| pants2 wrote:
| Last time I was shopping for home insurance, an agent told me
| I was too close to a canyon, which I thought was strange
| because there are no canyons near me. They sent me a
| screenshot of the fire danger map where clearly it had the
| wrong location / coordinates for my address (they thought I
| was about a mile from where I really live).
|
| I pointed them to my address on Google Maps which has my
| correct location, but they said their system isn't wrong and
| the address coordinate mapping can't be changed anyway. Go
| away.
|
| Then another insurance company told me the same thing. I
| thought maybe I was going to be uninsurable completely based
| off of a computer error.
|
| Luckily, Lemonade has smarter systems and got my location
| right, so I was able to get insured with them. But I'm not
| sure what I would do without lemonade.
| gxs wrote:
| In these cases, the argument is always of the type you just
| mentioned.
|
| "What's the big deal the data is already available, relax". On
| top of that, it comes with an air of condescension as if no one
| had ever thought about that before.
|
| One concern with things like this is that it's different when
| you have to send someone out to inspect a home vs inspecting
| thousands of homes at a time. Once you have data in that
| volume, you can start to infer things that do borderline
| encroach on privacy.
|
| What is the case here, and it might be what you were trying to
| point out, is that this kind of data is already collected
| regularly and is by the books legal. The concern here is simply
| at the application.
|
| At this point the cats out of the bag and the best we can hope
| for is at least some level of protection through legislation.
| tptacek wrote:
| Again: insurers can and do demand _home inspections_ when
| underwriting. This is strictly less intrusive than common
| existing practices in insurance.
| kmbfjr wrote:
| Allstate refused to offer a policy quote because my house is
| fuzzed out on its street view photo from 2011.
| switch007 wrote:
| We are sprinting towards a dystopia of "computer says no".
| Decisions taken affecting your life and finances made by
| computers delivered by minimum wage powerless staff.
|
| I'm sure healthcare insurance companies are inspired by the
| actions of the home insurance companies. "you declared you never
| smoked but our drone footage shows you and a plume of smoke in
| the same area. The AI detected it as cigarette smoke. Your
| coverage is cancelled and this is our final decision. "
| d--b wrote:
| A legal question here: are we allowed to shoot down a drone that
| snoops over our house?
| superultra wrote:
| My good friend works as an insurance agent. According to him,
| insurers are dropping customers based on _anything_ right now.
| It's caused chaos in the agency business, particularly in certain
| states.
|
| My bet is aerial images are just one way of many that they're
| dropping customers.
| londons_explore wrote:
| > If your roof is 20 years old and one hailstorm is going to take
| it off,
|
| It amazes me that people in the US would even consider installing
| a roof that would only last 20 years.
|
| In the UK, you wouldn't consider reroofing anything that your
| grandparents remember being installed. Ie. Stuff doesn't get
| reroofed till it's 100 years old. Even then, you'll normally
| inspect and only replace the damaged bits.
|
| My 350 year old house still has part of its original roof and
| slate tiles etc.
| hikingsimulator wrote:
| The weather in the US can be wild compared to what Western
| Europe is used to. England doesn't have to deal with the same
| events.
| rvba wrote:
| Those Ukrainian concrete buildings can take a bomb and still
| stand...
| zwayhowder wrote:
| My house is about 100 years old and still has the original
| concrete tile roof, with a stack of spare tiles under the house
| ready if needed.
|
| An extension that was done in the 1980s has had to have its
| roof replaced once already due to what I have to assume was
| poor workmanship by the builder.
| EligibleDecoy wrote:
| It's called "money." That is the reason. Slate roofs are common
| in the UK, and using synthetic slate is $7-12/sqft, whereas
| bitumen/asphalt shingles which are common in the USA cost
| $0.50-$1.00/sqft. Average home in the USA is 2,200 sq ft with a
| roof size of 1,700 sq ft. So $1,700 vs $11,900 is quite a
| difference (and that was being most generous, excluding
| installation costs, etc) So basically, average person who owns
| a house has a big house, and big roofs are already expensive.
| Regardless of wanting to get a high quality roof that would
| last more than 30 years, that requires capital - more than the
| average owner really has access too. Sources:
| https://www.architecturaldigest.com/reviews/roofing/slate-ro...
| https://www.architecturaldigest.com/reviews/roofing/shingle-...
| https://www.rocketmortgage.com/learn/average-square-footage-...
| https://www.rubyhome.com/blog/roofing-stats/
| sologoub wrote:
| Materials may cost that, but you are not getting a roof
| replaced for $1,700. Maybe $17,000 and even then it's pushing
| it on the coasts especially. Labor and other overhead costs
| have really gone up and contractors don't want to deal with
| small jobs. Sad really.
|
| I've never seen slate roofs in California, so not sure if
| these are to code here. We looked at metal and other
| materials, but the problem is the weight is different, so now
| you are engaging an engineer to evaluate structure,
| submitting plans, dealing with code updates. Or just new
| asphalt shingles every 15-20 years. The payoff isn't there
| and folks don't tend to keep houses for generations, unlike
| in the UK.
| majormajor wrote:
| Different types of storm are one thing.
|
| I think the biggest difference, though, is that the
| stereotypical single family US home of the 19th/20th century US
| expansion is on a large plot of land and has - so far - been
| one to get remodeled/expanded/revised several times in a
| hundred years. Houses are generally treated as mutable things,
| and people also often expect to move within a few decades,
| spending more to put in something that will hold up a hundred
| years instead of twenty seems foolhardy to many. If you sell it
| the buyer will likely want a cosmetic refresh; if you keep it,
| you likely will too.
| IggleSniggle wrote:
| If you think that's wild, consider that the standard practice
| in Japan is to buy land and build new...even if that means
| tearing down the building that is currently built there. As a
| result, buildings are built more according to the rules of
| fashion, and building to last longer than the current occupant
| would seem like a foolhardy waste of money.
| duped wrote:
| No one is building homes to last 150 years in the United
| States, and very rarely do people want to buy homes built a
| century ago.
|
| Where I live we call a century-old home a "tear down" because
| it's probably in horrible condition. There are a handful in my
| neighborhood but they get sold at a discount, usually for new
| construction.
| 1vuio0pswjnm7 wrote:
| Works where archive.ph is blocked:
|
| https://cc.bingj.com/cache.aspx?d=1812931943850&w=GaxRXZW2Vc...
| dbg31415 wrote:
| I think this is fine, BUT...
|
| I think they should have to give people time to fix the problem
| before dropping them.
|
| A neighbor literally just got a letter in the mail, "We think
| your trees are over your roof. Policy cancelled immediately."
|
| There should be a warning period, "Hey we saw this, and if you
| don't fix it in 90 days we'll have to drop you."
|
| Insurance companies are free to do inspections, but there's still
| the stress that getting a notice like that does to someone.
|
| These days, who even reads letters from insurance companies in
| the mail?! I mean, I just chuck anything with a logo in the
| recycling.
|
| And, from what I can tell, the insurance company dropped my
| neighbor when they sent the letter... so he didn't even know he
| wasn't insured until he got the letter.
|
| Anyway... these companies aren't your friends. They're all out to
| screw you.
|
| USAA screwed me over bad recently, to the tune of nearly $300k...
| they forced me to use their contractor (or we won't cover your
| temp housing), said not to worry and promised me a "5 year
| workmanship warranty" on the work done by their contractor... but
| when the contractor was utter shit, they put me through their
| mediation, where their mediator said, "Yeah all this work done by
| the contractor is junk, it all has to be re-done... if they don't
| fix it, we'll eat their lunch!" but ultimately they didn't
| enforcing any of that with the contractor and let the contractor
| off without any consequences -- even insisted I pay the
| contractor. "Oh you had no right to expect the work would be
| professionally done..." the contractor said in court. It was all
| total BS. And they said, "USAA may promise you one thing, but
| contract we have means we aren't liable for any damages to your
| house, 35-foot trees we killed, foundations we cracked, garage
| doors we backed into, things our endless stream of disorganized
| day-laborers stole, etc..." USAA's mediation process was really
| just a play to run out the statue of limitations on the contract
| too, I felt. =P
|
| Live and learn... but insurance companies are heartless bastards.
| You can't trust them, and even the "good" ones will screw you if
| they can. Tell you one thing, and do another...
|
| If you have a flood, call your lawyer first, the insurance
| company second, and the water mitigation folks third. Get it all
| in writing, take more photos than you ever thought necessary, and
| hope you have an adjuster who isn't having a crappy day that day.
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