Home insurers are dropping customers based on aerial images

Post by brogrammernot » Sat, Apr 06, 2024, 7:45 PM UTC

jeffbee wrote: post #189

baronswindle wrote: post #135

Earlier quoted context omitted.

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…

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 r…

Post by gmd63 » Sat, Apr 06, 2024, 7:47 PM UTC

t0mas88 wrote: post #169

gmd63 wrote: post #72

Earlier quoted context omitted.

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 o…

Post by sokoloff » Sat, Apr 06, 2024, 7:52 PM UTC

DSMan195276 wrote: post #200

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?)

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…

Post by tptacek » Sat, Apr 06, 2024, 7:53 PM UTC

hilux wrote: post #168

tptacek wrote: post #139

Earlier quoted context omitted.

You're not legally obligated to pay for homeowners insurance.

It is probably required if you have a mortgage. And of course it's a practical requirement for anyone whose net worth is primarily in their home.

Post by tptacek » Sat, Apr 06, 2024, 7:54 PM UTC

creato wrote: post #173

tptacek wrote: post #134

Earlier quoted context omitted.

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.