Home insurers are dropping customers based on aerial images • Hacker News Board

Re: Home insurers are dropping customers based on aerial images

#101

Post by nradov » Sat, Apr 06, 2024, 6:07 PM UTC

pclmulqdq wrote: post #42

lukevp wrote: post #13

Earlier quoted context omitted.

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.

Re: Home insurers are dropping customers based on aerial images

#102

Post by tfehring » Sat, Apr 06, 2024, 6:07 PM UTC

mb7733 wrote: post #18

sircastor wrote: post #12

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…

> * 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.

Re: Home insurers are dropping customers based on aerial images

#103

Post by maxerickson » Sat, Apr 06, 2024, 6:08 PM UTC

rrix2 wrote: post #35

mb7733 wrote: post #27

Earlier quoted context omitted.

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

Are there a lot of downsides to that for home/liability insurance?

Obviously with something like medical insurance, where people often carry risks that are no fault of their own, there are downsides.

Re: Home insurers are dropping customers based on aerial images

#104

Post by [deleted] » Sat, Apr 06, 2024, 6:22 PM UTC

dmoy wrote: post #36

time0ut wrote: post #30

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 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.

[deleted]

Re: Home insurers are dropping customers based on aerial images

#105

Post by gmd63 » Sat, Apr 06, 2024, 6:27 PM UTC

nradov wrote: post #96

gmd63 wrote: post #67

Insurance bothers me for a few reasons: 1. What pisses me off more than anything else, it enables fraud that otherwise wouldn't exist. People manufacturing calamities and then claiming insurance allows dishonest people to get ahead in life over people who are honest and concerned enough about the future to buy insurance. Additionally, insurance fraud is net bad relative to other types of fraud because it encourages c…

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.

Re: Home insurers are dropping customers based on aerial images

#106

Post by halfcat » Sat, Apr 06, 2024, 6:28 PM UTC

hn_throwaway_99 wrote: post #52

dmoy wrote: post #39

Earlier quoted context omitted.

Do you live in CA? In recent years that's the majority of arbitrary cancellations I've heard about - companies pulling entirely out of CA.

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 droppe…

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.

Re: Home insurers are dropping customers based on aerial images

#107

Post by xyst » Sat, Apr 06, 2024, 6:29 PM UTC

throwaway74432 wrote: post #19

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 pa…

that’s because the insurance model is not based on individual performance but based on a collection of data points.

Insurance will jack up the renewal rates for everyone because there are increased number of accidents in your zip code or area. Cars are more expensive now. Often adjusters just declare vehicles no longer worth the repair. Some vehicles if they get dented will result in a shit ton of work to get it repaired (ie, Rivian truck).

You are paying for the insurance companies increased risk because the people around you can’t drive worth shit.

Got to love car centric transportation …

Re: Home insurers are dropping customers based on aerial images

#108

Post by Analemma_ » Sat, Apr 06, 2024, 6:30 PM UTC

landedgentry wrote: post #17

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.

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.

Re: Home insurers are dropping customers based on aerial images

#109

Post by jjtheblunt » Sat, Apr 06, 2024, 6:33 PM UTC

brogrammernot wrote: post #69

landedgentry wrote: post #17

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’m not seeing you motivate or justify the rate increases.

Re: Home insurers are dropping customers based on aerial images

#110

Post by Analemma_ » Sat, Apr 06, 2024, 6:33 PM UTC

j45 wrote: post #88

danielmarkbruce wrote: post #58

Earlier quoted context omitted.

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 s…

Except when those companies have lobbied to create laws to make the use of their industry mandatory.

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.