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.
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.
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.
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.
LOL. Police around here will routinely use rotary for grocery store thefts, fixed wing for pursuit of non-violent suspects. In fact a couple of weeks ago, they deployed a State Patrol fixed wing to come south about 40 miles to here to look for "a group of young males dressed in black that were graffiting numerous buildings in town".
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.
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...)
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.
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.
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.
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.
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
"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."
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?
I imagine insurers are working very hard to identify which low probability events are likely going to happen for specific people. They might be doing detailed continual examinations of their homes for example.
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?
First of all: the payout you get from insurance does not come only from the premiums you personally pay. If you make a claim, your expenses are covered by the pool of money of all customers, even those that do not make any claims.
Second of all: when you take out an insurance policy and pay your first premium, you are immediately covered. If you are "self insuring" by setting aside the same amount monthly, it will take you a long time to even begin to accumulate enough funds to cover yourself in case of catastrophe. (And due to the first point, you may never reach that point.)
Finally, yes, of course, there is no need to take out an insurance policy for a risk that you can afford to pay out-of-pocket. It's like how if you have the cash to pay for a house, there is no need to take out a mortgage.
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.)
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
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.
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!
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.
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.
There is no "diffusion over time" with variable premia and short terms. Insurance companies already know the probability of an event within a risk pool over a term. That's not what this is talking about. They are looking to condition on more and more information so as to slice a risk pool towards a 0-1 risk, which, because they are positive EV, will make their profit more and more certain. They are looking to eliminate the negative tail, the existence of which is the whole point of paying out that positive EV.
In the end, this is going to happen. Insurance companies will be soothsayers and get paid for essentially making advisory predictions, not offloading risk, while society will have to agree to bear the cost of known outcomes over which people generally have no individual agency.
> 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.
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.
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...."
Insurance protects against unexpected losses during the policy period. An insurance policy is not a home warranty.
If your roof has a finite lifetime and is approaching the end of its life, the cost of insuring your roof will be close to the cost of a new roof. If your insurance company is not allowed to increase your rate to match your risk (which seems to be the case in California), they will drop you as a customer.
Your previous premium payments insured against the risk of unexpected loss during those earlier policy periods only. They have nothing to do with your current insurance rate.
> 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.
If you can manage your finances well, then sure. Many people would see that pile of cash in their savings and spend it. Paying a monthly amount to a third-party is safer in many ways, even if you have some % of overhead.
I don't care how well you manage your expenses, it doesn't make sense to keep enough cash on hand to rebuild your house if it burns to the ground. (Not to mention that is completely impossible for almost everyone.)
so in your world, it's irresponsible to own anything unless you also put its replacement cost in escrow. house burned down two weeks after closing? fuck you, take the loss and enjoy being broke or homeless. that's asinine. think more before posting in the future.
I'm open to having my mind changed, but when you post with this attitude it achieves no purpose.
You assumed my views without asking.
My comment only referred to there still being a benefit in choosing to have insurance even with perfect information about risk and expected benefits. At no point did I even imply that I thought "it's irresponsible to own anything".
If you dispense with insurance entirely, how do you deal with catastrophic expenses? The key things I think you are not considering are:
1. If you choose not to take out an insurance policy, and instead save the money yourself, you will not have the lump sum immediately available to cover catastrophe. Whereas as soon as you start paying insurance premiums you are covered.
2. The payout you receive when you make an insurance claim does not just come from the premiums you have personally paid. In fact, for a rare event, the size of the payout likely exceed the total cost of all premiums you could pay over your entire lifetime. This is because the risk is pooled over all customers, and not all customers will make claims.
Neither of the above 2 points become any less relevant as the insurance premiums become more and more accurately priced.
> If you dispense with insurance entirely, how do you deal with catastrophic expenses?
If insurance can accurately predict losses that will occur and price accordingly, you are paying exactly the same amount plus overhead, on a similar schedule for insurance as directly paying for losses yourself without insurance.
The cost spreading effect (both over time and over individuals) is a direct consequence of the inability to accurately predict losses and the resulting inability to price accurately.
> If insurance can accurately predict losses that will occur and price accordingly, you are paying exactly the same amount plus overhead, on a similar schedule for insurance as directly paying for losses yourself without insurance.
The hypothetical that I'm working with is that the insurer can perfectly price insurance by perfectly estimating the _risk_ or _expected loss_ for each individual customer. They can then pool this risk, take a profit, and everyone wins.
This is what I assumed you meant by "perfectly priced insurance". But I've realized you're talking about the case where insurer has perfect knowledge of the future losses each individual will take. I agree in this case insurance will not make sense. Insurance would be free for most individuals and impossibly expensive for those doomed to catastrophe. (The latter group would be screwed, even if they shared perfect knowledge of the future with the insurer.)
> The hypothetical that I'm working with is that the insurer can perfectly price insurance by perfectly estimating the _risk_ or _expected loss_ for each individual customer.
So is mine. But my premise is that the true risk (that is, what uncertainty cannot be eliminated with sufficient information about the current
state physical universe) is small, most of the apparent risk is just insufficient current data or an insufficient model; things like the drone data gathering are an attempt to narrow the first problem, and the second will improve over time with scientific progress.
As those improve, the expected loss converges toward the actual loss (and does so at any given proximity on progressively shorter timelines.)
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.
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”?
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.
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.
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.
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...
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.
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.
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?
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.
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.
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.
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.
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.
Possibly. Also in my country (in EU), the home insurance doesn't cover your liability for an accident like this. That would be another type of insurance you buy extra.
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".
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
> * 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.
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.
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.
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.
> 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.
> 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.
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.
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.
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.
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.
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".
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.
What do you expect when the market collapses and most suppliers leave? Of course everyone else will raise their prices. Now Florida needs to wait for insurers to come back and competition will happen.
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.
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.
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.
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.
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.
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...)
I’m not sure why you’re sherry picking the article, it very clearly says multiple insurance companies are doing this, and you claim this is some sort of bad thing that would stop someone from getting insurance.
Your logic is completely falling apart, that’s why you’re confused.
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.
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.
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.
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.
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.
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.
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.
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.
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".
I agree that 200k is a much better minimum. Although I would think a deposit of $200k should be just as good as a policy of $200k... But the Ontario law doesn't allow for a deposit.
I wonder if there's a speciality business available in Ontario for single customer insurance, so individuals or businesses can self-insure without risk pooling.
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.
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.
> I’ve known plenty of people who had legitimate accidents not of their own fault where insurance made them more than whole
And I know plenty of people myself, who had legitimate accidents not of their own fault who were left $10-15K out of pocket after insurance and settlements.
Let's start with a car that was two years old, I owed $22K on. Car was totaled and most of the comps from the insurer was $25-28K. Oh good, says I. And then they find one 150 miles away that is $13,500. This drags the value down to about $20K. While there's obviously something wrong with this entry, "Doesn't say salvage title in the ad, so it's a valid comp".
It takes them over a month to figure this out, all the while they have me in a rental, and then try to tell me that they're only covering one week of rental coverage. Had to threaten to sue to get compensation for my injured wrist/arm (which was hyperextended when the airbag went off as I was holding the steering wheel).
I still ended up losing out on $6K 'equity' in my car, having to come up with another downpayment, and months of calls from various medical providers who were having a hard time getting my insurer to pay their bills.
For another driver who ran a stop sign, t-boned me, and whose insurance had admitted 100% liability within 48 hours.
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.
They are not wrong. Insurance with perfect info ceases to ne any form of a recognizable social good. In fact, it just becomes indistinguishable from a sanctioned form of populational segregation, instead of the pull-a-long stick-with-carrot through which risk is mitigated against long tail events through active propagation of best practices as a condition of coverage.
Insurance companies should be exposed to the same level of risk as anyone else, which includes having things boow up in your face if you mismanage your float.
Their comment didn’t add anything to the conversation, contrasted with yours I’m sure you can see the difference.
I agree with your commentary, my point was that they’re (insurance companies) unable to use the information they learn or newer predictive elements to help avoid the mismanagement.
Arbitrary decisions by these elected or appointed officials, as I have seen first-hand, ignoring the reality that if they aren’t able to off-set that risk it comes at great cost to the company first and their constituents later as a knock-on effect results in the only way to not have it “blow up in their face” by removing services.
So to your point, the lack of ability of control rates in a more reasonable fashion (I’m not pro no regulations btw) actually results in the same thing you’ve pointed out above - the ones who need the insurance the most can no longer get it or cannot get adequate coverage.
Insurance with perfect info would be an amazing social good. If they could say "you can build a house there, but it will burn down in a forest fire 15 years from now", we could make an informed decision on if we want to build that house.
That's not insurance then. The whole point of insurance is shared risk in circumstances where perfect information is not available but a reasonable calculation of risk for the cohort is.
Yes, insurance companies should sometimes lose money on business that they expected to be profitable. But they shouldn’t be writing business that they expect to be unprofitable a priori. Many states and lines of business are firmly in the second category right now due to overzealous insurance regulators.
Then maybe they should have worked with customers proactively to prune trees and set up fire exclusion zones or fire resistant exteriors instead of sitting on their laurels raking it in.
Seconded. Also let’s require PG&E (the company that set the fires) to actually follow the maintenance and safety schedules they repeatedly promise to follow and repeatedly fail to follow.
If losses reach the point where it's irrational to invest in insurance businesses versus other competing business propositions, insurers exit the market, and the boo-hoo is on you. You can moralize your way out of cuts in profits, but you can't moralize your way out of sustained losses.
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.
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.
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.
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.
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.
Whether this even happened is questionable. Regardless, we trust government regulators to operate in good faith 10x more than private sector corporations.
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.
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.
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.
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.
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).
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.
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.
I think it needs to also be acknowledged that insurance itself is a moral hazard. Focusing on the "efficiency" and moral hazards of only the insureds is an incomplete analysis.
Insurance is a for-profit enterprise and as an expert told me, "the goal of insurance companies is to not pay claims". It essentially wants to be passive income at the end of the day.
Modern capitalism runs on insurance but should it? Health insurance is a great example: it shouldn't exist, and is unnecessary in single-payer systems. Car insurance is another example, where you can argue that insurance is locked-in to hide the fact that cars are systematically unsafe. Note how you don't need insurance to ride the subway.
The point is, insurance exists to make rich people richer off of risks that could be addressed socially in other ways. When we see that entire states are losing home insurance because of other systematic problems like climate change we should look at the system itself. Maybe making profit off of people's unavoidable risk isn't a great idea.
EDIT: in response to parent, my point is that focusing on the ills of regulators harming efficiency needs to account for the impossible job regulators have in the first place, which is making an unfair system (insurance) fair.
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.
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.
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.
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.
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?)
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.
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.
> 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.
Hard to ‘refrain’ from buying health insurance in the middle of cancer treatment eh?
Or ‘refrain’ from buying house insurance because someone tripped in your house and is suing you for $1M worth of damages, or you discovered your house was built in a high risk fire zone.
Or ‘refrain’ from buying vehicle insurance after an accident because the state will not let you drive without valid insurance.
That’s the whole point.
Because for normal humans, there is no difference between ‘insurance won’t be issued’ and premiums shooting up from $100/mo to $90k/mo. especially when the policy renewal period is in the middle of whatever is going on. Like trying to live. And if insurance companies didn’t have caps on premiums, that’s what they’d do - or just cancel it to avoid even worse PR.
At least ‘pre existing conditions’ aren’t automatically a death sentence when trying to switch insurance anymore eh?
> Hard to ‘refrain’ from buying health insurance in the middle of cancer treatment eh?
The thing you're insuring against in this case is a cancer diagnosis. If you're insured when that happens, the insurance company should now be on the hook for your lifetime worth of cancer treatment regardless of whether you pay them any more premiums. That isn't how we implement it, the existing regulations don't work like that, but that's how it would work if what you were buying was actually insurance. The insurer eats the cost at the point when the unknown risk becomes known.
> Or ‘refrain’ from buying house insurance because someone tripped in your house and is suing you for $1M worth of damages
You don't have to buy liability insurance if you own your house. Of course, then if your negligence injures someone they're going to get the house instead of the insurance company's money, but that's up to you. And can be avoided in either event by not giving people valid legal claims against you.
Notice that a single claim is generally not enough to make insurance unaffordable, and multiple large valid claims is generally a sign that you're doing something wrong.
> or you discovered your house was built in a high risk fire zone.
It's not the insurance company's fault that you bought a house without checking what it would cost to insure. The cost of insuring houses there is supposed to be high, to deter people from building them there.
> Or ‘refrain’ from buying vehicle insurance after an accident because the state will not let you drive without valid insurance.
So you take the bus or move to a walkable neighborhood. What's your alternative, that someone can total two new cars every week and still get insurance for the same rates as anyone else?
> Because for normal humans, there is no difference between ‘insurance won’t be issued’ and premiums shooting up from $100/mo to $90k/mo.
But why should an insurance company be required to insure you at all? "Known arsonists can't get/afford fire insurance" is fine. "People who get into a major car accident every week can't get/afford car insurance" is fine.
> especially when the policy renewal period is in the middle of whatever is going on.
That's not how insurance works. You buy insurance, then something happens, then you file a claim. They can't retroactively raise your premiums, they can only raise the future ones because there is now evidence that your risk is higher, and then you get to decide if continuing to carry insurance is worth it, and you still get the money from the claim that happened while you were insured. Then you can either choose to pay the higher rates, go uninsured going forward or stop doing the thing you need insurance coverage for.
> At least ‘pre existing conditions’ aren’t automatically a death sentence when trying to switch insurance anymore eh?
This has a similar effect to putting the full lifetime cost on the insurance company you had when you got diagnosed, except that you can then change insurance companies. Which is weird and has perverse incentives, like there is no reason to carry good insurance against long-term cancer treatment until after you find out you have cancer. Which makes the good insurance much more expensive because buyers would self-select and only people who know they have cancer would buy it.
Then we try to avoid that by tying health insurance to employment which makes it harder for people to switch when they get a diagnosis, and that in turn has a ton of other negative effects because now there is much less competitive pressure in the health insurance market.
Regulators seem to really suck at thinking through the consequences of what they're doing. Or they don't and someone is getting paid to do it this way on purpose.
> You can’t get a mortgage without house insurance.
You don't have to get a mortgage to live. You can save up and pay cash, or you can rent. Or you can pay the higher premiums that reflect your actual risk.
> Things like fire danger risk tend to change after the home is built as new data comes in.
In which case this is a different class of insurance that you could buy if you wanted it. You wouldn't be insuring against fire, you'd be insuring against the risk of your property value going down to reflect higher fire insurance premiums if the fire risk goes up. But why should you be forced to buy that type of insurance if you don't want it, or have it priced into everyone else's fire insurance premiums?
And regardless of that, why should someone who buys their house after the fire risk is known to be high be subsidized by everyone else?
> Health insurance isn’t implemented that way, as you acknowledge, exposing folks to exactly that risk.
It isn't implemented that way because of regulations, but the issue is what kind of regulations there should be. The existing regulations are extremely inefficient -- Americans pay more for healthcare/insurance than any other country, regardless of whether the other country has a public or private healthcare system.
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.
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.
Not a good comparison - you can also choose to go without buying a house, its a very US thing to measure success in life with such (massively incorrect) yardstick.
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?
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.
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.
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.
Imagine a world where only the people like you can be insured. Everyone else, “of which there are too many to count,” has to go without insurance because they can’t get approved or the premiums are so insane they can’t afford it. Some of those people may take it to heart and change their behavior, but some will not.
Now imagine one of those uninsured people causes an accident, and you get seriously injured. You sue, but this person is broke as a joke, so you never manage to get anything meaningful back. In fact, you probably wouldn’t even be able to get a lawyer to take your case, since they know they wouldn’t even be able to collect enough to cover their fees. That’s why you “have to pay for every ridiculous idiot.” I suppose could round them all up and put them in camps, and then your premiums would be lower.
Or consider major medical insurance. Before the ACA, in the US, people with pre-existing conditions couldn’t get individual health insurance, or if they did, it was incredibly expensive. These people didn’t necessarily do anything wrong, but their healthcare costs were higher than any individual could reasonably afford. Did they not deserve healthcare?
> 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.
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.
> If you do that, you must also regulate the sort of vehicles ordinary people can buy and the sort of homes they can own.
There are two provinces in Canada (British Columbia and Saskatchewan, since 1973 and 1945 respectively) who have a crown insurance corporation and require everyone purchase insurance through the government.
> 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.
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.
Reinsurance isn’t magic. This helps with one-off losses, but if you’re fundamentally not able to make a profit, they’re not going to cover you, because all you’ve done is shift the negative expected value to them.
It also probably increases the odds of total ruin... think a Katrina or an Andrew but a bit worse. On a smaller scale, it's never gonna be just one car in a town with hail damage.
If you believe that in an infinite time scale the spike of a "random walk martingale" will exceed every level, then you also believe that you'll go bankrupt even if you don't sell insurance at break even. Maybe mathematically incorrect, but entirely irrelevant in the real world.
IN ADDITION, the money that insurers make isn't just the underwriting profit but also the investment profit. You you're talking twice as much shit as the average HN commenter.
You can prove mathematical propositions, you obviously can't make truthful conclusions about insurance. And that's really the crucial parts. Anyone can make prove mathematical statements.
Reminds of the guy who lost his keys in the darkness and was looking for the keys under the lamp because that's where he can see. Likewise, you're using your tools and hoping that the tools have some connection to real life.
You sound like one of those "that's all good in practice but it would never work in theory" type of people.
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.
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.
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.
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.
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.
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.
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.
“When it comes to rate regulations for overall insurance, according to state regulations they should not be excessive in any way. This means that they must be affordable, and are not set too high in relation to insurance claims. Insurance rates should also not be inadequate. This means that they should not be marketed at a rate that is too low. The Insurance rates should also not be discriminatory in any nature, meaning that all insureds are charged similarly for similar coverages. These rate regulations are imposed on insurance companies in order to protect consumers. (Dorfman and Cather)”
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!
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.
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?
One key part of the formula omitted is most major insurers while posting underwriting losses in certain markets, etc in 2023 posted annual net profit over $1.0bn. Am I right in thinking these sweeping rate increases and market exits are justified by protection of $250mm+ per quarter net income? If so, then are we right to blame anybody other than the insurers shareholders and owners for this current state? Wouldn’t $25mm per quarter net income be sufficient? Why does runaway profits maxxing have to apply to every market including public good markets like insurance?
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.
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.
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.
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.
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.
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.
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.
> 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.
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.
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.
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.
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.
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.
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.
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?
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.
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?".
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.
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.
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.
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…
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.
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.
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.
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.
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.
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.
> 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.
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);"
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?
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.
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.
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.
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.
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.
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.
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.
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.
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:
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.
> 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.
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.
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.
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
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.
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.
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.
Why then is the opposite true? Just playing devils advocate. Do you see the lopsidedness between the two? They [the 'rights'] don't extend infinitely into space. okay, fair enough. Why does theirs extend all the way to the ground? Exceptions / loopholes could be made to accommodate non-visually penetrable mediums and means, like weather technology. And if the government really wanted to spy on their own (as if), they could just say it was a weather balloon that had the legal clearance. if it ever crashed, I mean. point is, there's lots of language that could be defined in order to allow spying, allow air traffic, but not allow a telescope, nay-- microscope, effectively--of studying us down here on earth. while naked. (us, I mean, maybe them, too). the government is just going to do whatever the hell it wants anyway, just put that in the legal work, gov: do as you will. problem solved
question: can a spy telescope, when it comes to apertures, lenses, focal point and scale, but most importantly perhaps, intent, be considered a microscope depending on which way its pointing? it seems to me that given the size of earth, the size of humans in realtion to that, how is it any different than monitoring a bacterial colony Wirth a microscope? functionally. its not different, right? or perhaps its more nuanced than functionally, but surely its closer to being a microscope, than a "telescope"?
street maps could definitely still exist. I saw a project here on hn that showed a land surveying satellite that was able to track land parcels and shade them accordingly using AI. and, if they can blur faces out I know they can blur rooftops and naked bums.
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.
Why is that the real question? Shouldn't the real question be: do we want, as a society, to allow something like arial photography of your roof freely accessible to data brokers so that they can form a shadow profile of you and determine how much you pay for insurance?
That a law against such a practice does or does not exist today is rather besides the point.
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.
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.
So wattle-it-be... switch insurers, live underground, or plant trees? Wattles are fast-growing and there's plenty of choice. http://worldwidewattle.com/
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!!
> “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?
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?
It is NOT the insurance company's job to replace a worn-out roof. That is YOUR responsibility!
If a roof on your home is not up to the proven (albeit occasional) stresses of your local environment (including snowfall, winds, volcanic ash, etc.), whether due to quality, design, or wear, I see no reason why the insurer should not modify its indemnity.
I will grant you that a decent insurer would allow you to petition for a review based on any verifiable additional information that you, as owner and insured, might be able to present.
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[ 1.8 ms ] story [ 435 ms ] threadIt’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.
Also, the only thing stopping medical insurers from denying coverage or increasing prices for people with pre-existing conditions is the Affordable Care Act.
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.
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."
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?
Second of all: when you take out an insurance policy and pay your first premium, you are immediately covered. If you are "self insuring" by setting aside the same amount monthly, it will take you a long time to even begin to accumulate enough funds to cover yourself in case of catastrophe. (And due to the first point, you may never reach that point.)
Finally, yes, of course, there is no need to take out an insurance policy for a risk that you can afford to pay out-of-pocket. It's like how if you have the cash to pay for a house, there is no need to take out a mortgage.
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.)
Put another way, if the insurance company isn't taking on any risk then you are.
Obviously with something like medical insurance, where people often carry risks that are no fault of their own, there are downsides.
There's no pooling of risk at all.
In the end, this is going to happen. Insurance companies will be soothsayers and get paid for essentially making advisory predictions, not offloading risk, while society will have to agree to bear the cost of known outcomes over which people generally have no individual agency.
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.
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...."
If your roof has a finite lifetime and is approaching the end of its life, the cost of insuring your roof will be close to the cost of a new roof. If your insurance company is not allowed to increase your rate to match your risk (which seems to be the case in California), they will drop you as a customer.
Your previous premium payments insured against the risk of unexpected loss during those earlier policy periods only. They have nothing to do with your current insurance rate.
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.
You assumed my views without asking.
My comment only referred to there still being a benefit in choosing to have insurance even with perfect information about risk and expected benefits. At no point did I even imply that I thought "it's irresponsible to own anything".
1. If you choose not to take out an insurance policy, and instead save the money yourself, you will not have the lump sum immediately available to cover catastrophe. Whereas as soon as you start paying insurance premiums you are covered.
2. The payout you receive when you make an insurance claim does not just come from the premiums you have personally paid. In fact, for a rare event, the size of the payout likely exceed the total cost of all premiums you could pay over your entire lifetime. This is because the risk is pooled over all customers, and not all customers will make claims.
Neither of the above 2 points become any less relevant as the insurance premiums become more and more accurately priced.
If insurance can accurately predict losses that will occur and price accordingly, you are paying exactly the same amount plus overhead, on a similar schedule for insurance as directly paying for losses yourself without insurance.
The cost spreading effect (both over time and over individuals) is a direct consequence of the inability to accurately predict losses and the resulting inability to price accurately.
The hypothetical that I'm working with is that the insurer can perfectly price insurance by perfectly estimating the _risk_ or _expected loss_ for each individual customer. They can then pool this risk, take a profit, and everyone wins.
This is what I assumed you meant by "perfectly priced insurance". But I've realized you're talking about the case where insurer has perfect knowledge of the future losses each individual will take. I agree in this case insurance will not make sense. Insurance would be free for most individuals and impossibly expensive for those doomed to catastrophe. (The latter group would be screwed, even if they shared perfect knowledge of the future with the insurer.)
So is mine. But my premise is that the true risk (that is, what uncertainty cannot be eliminated with sufficient information about the current state physical universe) is small, most of the apparent risk is just insufficient current data or an insufficient model; things like the drone data gathering are an attempt to narrow the first problem, and the second will improve over time with scientific progress.
As those improve, the expected loss converges toward the actual loss (and does so at any given proximity on progressively shorter timelines.)
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.
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.
“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.
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.
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.
Trampoline installed well (i.e. staked down) with proper netting = who cares
Trampoline unsecured, no net = wind risk, personal injury risk, death risk
The tortable aspect (compensation for causing personal injury) must also be covered.
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.
https://www.mayoclinic.org/medical-professionals/pediatrics/...
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.
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.
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.
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.
There's a few obvious exceptions, but plenty of insurance isn't required.
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.
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.
But that doesn't imply what you're saying unless the supplier has monopoly power, which they, by law, do not.
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.
And of course it's a practical requirement for anyone whose net worth is primarily in their home.
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.
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.
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.
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.
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.
The primary insurance market is even more illiquid than thinly traded options.
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.
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...)
Your logic is completely falling apart, that’s why you’re confused.
How else are execs going to pay for that third vacation home?
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.
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.
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.
Home insurance isn't mandatory, but refinancing your mortgage is impossibile without one.
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.
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.
Construction is pretty expensive too.
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.
That said, that seems like a risky idea in a world full of LLCs, trusts, etc.
It's completely insufficient, but it's not nothing. A reasonable person would carry much more insurance.
In either the bond, deposit, or liability insurance scenario, the responsible party remains on the hook for whatever is not covered in advance.
$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
I agree that 200k is a much better minimum. Although I would think a deposit of $200k should be just as good as a policy of $200k... But the Ontario law doesn't allow for a deposit.
I wonder if there's a speciality business available in Ontario for single customer insurance, so individuals or businesses can self-insure without risk pooling.
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...
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.
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.
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.
And I know plenty of people myself, who had legitimate accidents not of their own fault who were left $10-15K out of pocket after insurance and settlements.
Let's start with a car that was two years old, I owed $22K on. Car was totaled and most of the comps from the insurer was $25-28K. Oh good, says I. And then they find one 150 miles away that is $13,500. This drags the value down to about $20K. While there's obviously something wrong with this entry, "Doesn't say salvage title in the ad, so it's a valid comp".
It takes them over a month to figure this out, all the while they have me in a rental, and then try to tell me that they're only covering one week of rental coverage. Had to threaten to sue to get compensation for my injured wrist/arm (which was hyperextended when the airbag went off as I was holding the steering wheel).
I still ended up losing out on $6K 'equity' in my car, having to come up with another downpayment, and months of calls from various medical providers who were having a hard time getting my insurer to pay their bills.
For another driver who ran a stop sign, t-boned me, and whose insurance had admitted 100% liability within 48 hours.
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.
Insurance companies should be exposed to the same level of risk as anyone else, which includes having things boow up in your face if you mismanage your float.
I agree with your commentary, my point was that they’re (insurance companies) unable to use the information they learn or newer predictive elements to help avoid the mismanagement.
Arbitrary decisions by these elected or appointed officials, as I have seen first-hand, ignoring the reality that if they aren’t able to off-set that risk it comes at great cost to the company first and their constituents later as a knock-on effect results in the only way to not have it “blow up in their face” by removing services.
So to your point, the lack of ability of control rates in a more reasonable fashion (I’m not pro no regulations btw) actually results in the same thing you’ve pointed out above - the ones who need the insurance the most can no longer get it or cannot get adequate coverage.
Also human nature is to look at the odds and not believe you’re going to be that 1 in 125,000 :)
Tobias: No, it never does. I mean, these people somehow delude themselves into thinking it might, but ... But it might work for us.
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.
For all these reasons, insurers typically must justify rate increases.
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.
Whether this even happened is questionable. Regardless, we trust government regulators to operate in good faith 10x more than private sector corporations.
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.
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.
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…
I was very confused until I realized they were doing exactly what you said.
If everybody is sharing all the risk that’s the same thing (obviously I’m being simplistic) as them underwriting the risk themselves.
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).
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.
Insurance is a for-profit enterprise and as an expert told me, "the goal of insurance companies is to not pay claims". It essentially wants to be passive income at the end of the day.
Modern capitalism runs on insurance but should it? Health insurance is a great example: it shouldn't exist, and is unnecessary in single-payer systems. Car insurance is another example, where you can argue that insurance is locked-in to hide the fact that cars are systematically unsafe. Note how you don't need insurance to ride the subway.
The point is, insurance exists to make rich people richer off of risks that could be addressed socially in other ways. When we see that entire states are losing home insurance because of other systematic problems like climate change we should look at the system itself. Maybe making profit off of people's unavoidable risk isn't a great idea.
EDIT: in response to parent, my point is that focusing on the ills of regulators harming efficiency needs to account for the impossible job regulators have in the first place, which is making an unfair system (insurance) fair.
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.
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.
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.
You mean like this one? https://www.yahoo.com/news/united-airlines-flight-diverted-t...
…I’ll see myself out.
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?)
Car prices are not regulated because there are plenty of options for the consumer.
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.
It’s a market type that is fundamentally messy and prone to abusive behavior by both sides.
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.
Or ‘refrain’ from buying house insurance because someone tripped in your house and is suing you for $1M worth of damages, or you discovered your house was built in a high risk fire zone.
Or ‘refrain’ from buying vehicle insurance after an accident because the state will not let you drive without valid insurance.
That’s the whole point.
Because for normal humans, there is no difference between ‘insurance won’t be issued’ and premiums shooting up from $100/mo to $90k/mo. especially when the policy renewal period is in the middle of whatever is going on. Like trying to live. And if insurance companies didn’t have caps on premiums, that’s what they’d do - or just cancel it to avoid even worse PR.
At least ‘pre existing conditions’ aren’t automatically a death sentence when trying to switch insurance anymore eh?
The thing you're insuring against in this case is a cancer diagnosis. If you're insured when that happens, the insurance company should now be on the hook for your lifetime worth of cancer treatment regardless of whether you pay them any more premiums. That isn't how we implement it, the existing regulations don't work like that, but that's how it would work if what you were buying was actually insurance. The insurer eats the cost at the point when the unknown risk becomes known.
> Or ‘refrain’ from buying house insurance because someone tripped in your house and is suing you for $1M worth of damages
You don't have to buy liability insurance if you own your house. Of course, then if your negligence injures someone they're going to get the house instead of the insurance company's money, but that's up to you. And can be avoided in either event by not giving people valid legal claims against you.
Notice that a single claim is generally not enough to make insurance unaffordable, and multiple large valid claims is generally a sign that you're doing something wrong.
> or you discovered your house was built in a high risk fire zone.
It's not the insurance company's fault that you bought a house without checking what it would cost to insure. The cost of insuring houses there is supposed to be high, to deter people from building them there.
> Or ‘refrain’ from buying vehicle insurance after an accident because the state will not let you drive without valid insurance.
So you take the bus or move to a walkable neighborhood. What's your alternative, that someone can total two new cars every week and still get insurance for the same rates as anyone else?
> Because for normal humans, there is no difference between ‘insurance won’t be issued’ and premiums shooting up from $100/mo to $90k/mo.
But why should an insurance company be required to insure you at all? "Known arsonists can't get/afford fire insurance" is fine. "People who get into a major car accident every week can't get/afford car insurance" is fine.
> especially when the policy renewal period is in the middle of whatever is going on.
That's not how insurance works. You buy insurance, then something happens, then you file a claim. They can't retroactively raise your premiums, they can only raise the future ones because there is now evidence that your risk is higher, and then you get to decide if continuing to carry insurance is worth it, and you still get the money from the claim that happened while you were insured. Then you can either choose to pay the higher rates, go uninsured going forward or stop doing the thing you need insurance coverage for.
> At least ‘pre existing conditions’ aren’t automatically a death sentence when trying to switch insurance anymore eh?
This has a similar effect to putting the full lifetime cost on the insurance company you had when you got diagnosed, except that you can then change insurance companies. Which is weird and has perverse incentives, like there is no reason to carry good insurance against long-term cancer treatment until after you find out you have cancer. Which makes the good insurance much more expensive because buyers would self-select and only people who know they have cancer would buy it.
Then we try to avoid that by tying health insurance to employment which makes it harder for people to switch when they get a diagnosis, and that in turn has a ton of other negative effects because now there is much less competitive pressure in the health insurance market.
Regulators seem to really suck at thinking through the consequences of what they're doing. Or they don't and someone is getting paid to do it this way on purpose.
Things like fire danger risk tend to change after the home is built as new data comes in.
Health insurance isn’t implemented that way, as you acknowledge, exposing folks to exactly that risk.
You seem to be stuck in theoretical. I’m talking about actual behaviors.
You don't have to get a mortgage to live. You can save up and pay cash, or you can rent. Or you can pay the higher premiums that reflect your actual risk.
> Things like fire danger risk tend to change after the home is built as new data comes in.
In which case this is a different class of insurance that you could buy if you wanted it. You wouldn't be insuring against fire, you'd be insuring against the risk of your property value going down to reflect higher fire insurance premiums if the fire risk goes up. But why should you be forced to buy that type of insurance if you don't want it, or have it priced into everyone else's fire insurance premiums?
And regardless of that, why should someone who buys their house after the fire risk is known to be high be subsidized by everyone else?
> Health insurance isn’t implemented that way, as you acknowledge, exposing folks to exactly that risk.
It isn't implemented that way because of regulations, but the issue is what kind of regulations there should be. The existing regulations are extremely inefficient -- Americans pay more for healthcare/insurance than any other country, regardless of whether the other country has a public or private healthcare system.
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.
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.
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.
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.
Now imagine one of those uninsured people causes an accident, and you get seriously injured. You sue, but this person is broke as a joke, so you never manage to get anything meaningful back. In fact, you probably wouldn’t even be able to get a lawyer to take your case, since they know they wouldn’t even be able to collect enough to cover their fees. That’s why you “have to pay for every ridiculous idiot.” I suppose could round them all up and put them in camps, and then your premiums would be lower.
Or consider major medical insurance. Before the ACA, in the US, people with pre-existing conditions couldn’t get individual health insurance, or if they did, it was incredibly expensive. These people didn’t necessarily do anything wrong, but their healthcare costs were higher than any individual could reasonably afford. Did they not deserve healthcare?
https://en.wikipedia.org/wiki/Insurance_Corporation_of_Briti...
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.
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.
There are two provinces in Canada (British Columbia and Saskatchewan, since 1973 and 1945 respectively) who have a crown insurance corporation and require everyone purchase insurance through the government.
Neither of them force everyone to drive a Lada.
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
That's commonly a requirement of regulation too. I've had refunds from car insurance and healthcare insurance because claims were lower than expected.
https://en.wikipedia.org/wiki/Law_of_the_iterated_logarithm
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.
If you believe that in an infinite time scale the spike of a "random walk martingale" will exceed every level, then you also believe that you'll go bankrupt even if you don't sell insurance at break even. Maybe mathematically incorrect, but entirely irrelevant in the real world.
IN ADDITION, the money that insurers make isn't just the underwriting profit but also the investment profit. You you're talking twice as much shit as the average HN commenter.
If you don’t sell at break even, it’s not a martingale, so the Law doesn’t apply.
Reminds of the guy who lost his keys in the darkness and was looking for the keys under the lamp because that's where he can see. Likewise, you're using your tools and hoping that the tools have some connection to real life.
You sound like one of those "that's all good in practice but it would never work in theory" type of people.
But if your business goes bankrupt with probability 100% with even a simplified mathematical model, I wouldn't want to invest 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.
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.
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.
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.
https://www.mass.gov/info-details/massachusetts-auto-insuran...
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.
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.
The state interest stems from the political interests of elected officials. See comment above by @broprogrammernot.
Source: https://www.lawteacher.net/free-law-essays/judicial-law/gove...
Why wouldn't they be?
The only reason why you might believe they shouldn't be is if you fell for the "free market knows all" nonsense.
I didn’t deal much on commercial insurance btw, I have _some_ awareness of that.
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.
For all? I'd think it reduces rates for some and increases it for others.
All of these things have either reduced or stabilized over the last two years, but prices seem to keep going up. Strange!
https://www.youtube.com/watch?v=xw8fpEpwMzA
What you can do, which the U.S. already does, is government-run insurance, socializing the losses among a population. Flood insurance, for example.
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.
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 …
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.
That may only be part of it, but it's definitely part of it.
I see an exciting new revenue stream in their future.
> 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.
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.
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.
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.
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.
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?".
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.
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...
Rules are rules.
This way individuals can correct their dangerous behaviour immediately, rather than accidentally accumulating a large fine.
If anything, overzealous adherence to the letter of the law, while annoying, seems the exact opposite of "corruption."
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.
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.
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/
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.
"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);"
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.
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.
In fact they're actuarially very, very boring!
Is there not an equivalent in the USA?
- What companies the customer quotes - What amounts they are offered
You should always quote competitors because stuff changes and there are sign-on discounts offered as well.
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.
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-...
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.
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...
The subject property, by the way: https://www.google.com/maps/place/2350+Buttes+View+Ln,+Aubur...
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.
https://news.ycombinator.com/item?id=36268907 ("French tax officials use AI to spot 20k undeclared pools (2022)", 166 comments)
> 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...
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...
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.
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.
question: can a spy telescope, when it comes to apertures, lenses, focal point and scale, but most importantly perhaps, intent, be considered a microscope depending on which way its pointing? it seems to me that given the size of earth, the size of humans in realtion to that, how is it any different than monitoring a bacterial colony Wirth a microscope? functionally. its not different, right? or perhaps its more nuanced than functionally, but surely its closer to being a microscope, than a "telescope"?
street maps could definitely still exist. I saw a project here on hn that showed a land surveying satellite that was able to track land parcels and shade them accordingly using AI. and, if they can blur faces out I know they can blur rooftops and naked bums.
That a law against such a practice does or does not exist today is rather besides the point.
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.
Can you share how to go about it? Do you have a blog post?
I'm an infra guy by trade and really enjoyed learning about the tech while on their team. Mind blowing stuff to me!!
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?