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Home insurers are dropping customers based on aerial images

wsj.com

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Re: Home insurers are dropping customers based on aerial images

#151

Post by t0mas88 »

steelframe wrote: post #85

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 op…

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.

Re: Home insurers are dropping customers based on aerial images

#152

Post by cool_dude85 »

twoodfin wrote: post #118
jjtheblunt wrote: post #109

Earlier quoted context omitted.

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

Why should any seller have to justify their prices? Just don’t buy their policy, buy someone else’s.

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.

Re: Home insurers are dropping customers based on aerial images

#153

Post by Ekaros »

jjtheblunt wrote: post #109
brogrammernot wrote: post #69

Earlier quoted context omitted.

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.

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.

Re: Home insurers are dropping customers based on aerial images

#154

Post by howard941 »

rufus_foreman wrote: post #125
bluejekyll wrote: post #50

Earlier quoted context omitted.

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.

That's not the issue in Florida. The issue in Florida is that "although Florida only accounts for 9 percent of the country’s home insurance claims, it is home to 79 percent of the country’s home insurance lawsuits". That's from https://www.bankrate.com/insurance/homeowners-insurance/flor... , which explains how the roofing scams work in that state. The legislature is working on it.

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.

Re: Home insurers are dropping customers based on aerial images

#155

Post by jeffbee »

nneonneo wrote: post #144
jeffbee wrote: post #123

Earlier quoted context omitted.

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…

I would definitely mind if the police were following me personally in an airplane…

Did you recently rob a bank or carjack an old lady? If not, I sincerely doubt that anyone would go to the trouble of following you around.

Re: Home insurers are dropping customers based on aerial images

#157

Post by kevin_thibedeau »

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 if you own the home.

Re: Home insurers are dropping customers based on aerial images

#158

Post by hn_throwaway_99 »

overstay8930 wrote: post #111
hn_throwaway_99 wrote: post #52

Earlier quoted context omitted.

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…

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.

Re: Home insurers are dropping customers based on aerial images

#159

Post by hilux »

brogrammernot wrote: post #132
ska wrote: post #129

Earlier quoted context omitted.

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…

Yup, exactly. Even worse for the consumer is that insurance rules say you have to “offer” insurance in the state to get your license. Well, you don’t want to drop your license but really don’t want to have a bunch of policies. What do you do? You make it impossibly difficult to get insurance. I’m not going to name names but a lot of insurance companies in California are doing this. No online applications, have to cal…

Yup - I have experienced this trying to buy health insurance (pre-Obamacare) in California.

I was very confused until I realized they were doing exactly what you said.

Re: Home insurers are dropping customers based on aerial images

#160

Post by AnthonyMouse »

gumby wrote: post #143
trogdor wrote: post #138

Earlier quoted context omitted.

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?)

For the same reason credit card interest rates are regulated: there's an asymmetry in bargaining power. Car prices are not regulated because there are plenty of options for the consumer.

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.

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