131–140 of 712 posts
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I’m not seeing you motivate or justify the rate increases.
What I saw was "supply chain got more expensive so $/claim went up and is outpacing premiums".
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I thought risk pooling was the point?
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…
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…
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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 l…
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Except when those companies have lobbied to create laws to make the use of their industry mandatory.
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…
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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 change…
I thought risk pooling was the point?
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In CA, a recent batch of wild fires wiped out 20 years of profits.
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You don't have to have home insurance by law, at least not in the US If you don't own your house outright, the bank that owns part of it may require insurance as a prerequisite for loaning you money.
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 w…
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.
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 change…
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?)
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.
Earlier quoted context omitted.
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 l…
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.