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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

#421

Post by MajimasEyepatch »

seanmcdirmid wrote: post #406
pants2 wrote: post #375

Earlier quoted context omitted.

Last time I was shopping for home insurance, an agent told me I was too close to a canyon, which I thought was strange because there are no canyons near me. They sent me a screenshot of the fire danger map where clearly it had the wrong location / coordinates for my address (they thought I was about a mile from where I really live). I pointed them to my address on Google Maps which has my correct location, but they s…

> Luckily, Lemonade has smarter systems and got my location right, so I was able to get insured with them. But I'm not sure what I would do without lemonade. Insurers with better information will be able to judge risk better, so they can undercut competitors on lower risk or avoid taking on higher risk. That really is what a competitive insurance market should be like right?

In the long run, yes, but Lemonade and other insurtechs have struggled to actually get that right. Their loss ratio (claims paid / premium collected) has historically been close to or above 100% (i.e. losing money), though I think Lemonade has finally been getting that under control recently.

Distribution is also a huge factor in who wins. You can have the best product, but if you can't get it out to enough people, whether direct to consumer or through agents, you're going to struggle. A lot of startups have focused on direct-to-consumer plays, but there's value in taking a hybrid approach to distribution and incorporating agents into your distribution strategy. It's surprising sometimes, for those of us with a tech background, to see how sticky human insurance agents have proven to be. I can make a better potato chip than Frito-Lay, but if I can’t get stores to stock it, it doesn’t matter how good it is.

Re: Home insurers are dropping customers based on aerial images

#422

Post by tptacek »

ssl-3 wrote: post #417
everybodyknows wrote: post #399

Earlier quoted context omitted.

It's interesting that insurers will spend money to discover this rather than rely on the pro forma clause that claims proceeding from an undisclosed risk are invalid. I'm guessing they calculate that a jury may not respect that part of the contract when confronted in court by grieving parents of an accident victim.

How is an unversed lay homeowner who is inexpert in the insurance industry (or perhaps even any industry) supposed to know what risks an insurer thinks are important? Their job, I think, is to accept the quote, pay the premiums, and to keep living life.

On 1-3 occasions over the course of an insured's entire life, they'll be confronted with the paperwork for the insurance contract for the most expensive asset they'll ever buy. They should read it.

Re: Home insurers are dropping customers based on aerial images

#424

Post by nelox »

pants2 wrote: post #375
imgabe wrote: post #338

Earlier quoted context omitted.

I think the issue is that in some cases the information is inaccurate and there are sometimes limited avenues for a customer to object if their insurance is cancelled based on inaccurate information. To the extent that the information is accurate, I agree. If you make an agreement with a company and buy insurance based on your statement that you don't have a pool, but then you do have a pool, I don't see any reason w…

Last time I was shopping for home insurance, an agent told me I was too close to a canyon, which I thought was strange because there are no canyons near me. They sent me a screenshot of the fire danger map where clearly it had the wrong location / coordinates for my address (they thought I was about a mile from where I really live). I pointed them to my address on Google Maps which has my correct location, but they s…

I wonder how many such properties are misclassified?

Re: Home insurers are dropping customers based on aerial images

#425

Post by PaulDavisThe1st »

wombatpm wrote: post #340
worik wrote: post #298

Earlier quoted context omitted.

The problem is the culling Insurance companies are very keen to get as much risk as possible off their books before the climate gets even more extreme in its volatility Good goes with bad, so long as the bad goes, some good going too is undesirable but OK because they are aware if the catastrophic climate events looming The insurance companies are behaving logically, probably legally IANAL, but for people who are sim…

Insurance companies want money to come in and never go out. If they could they would sell life insurance to dead people and homeowners insurance to the homeless.

That's why we regulate insurance companies in a way not particularly comparable with other businesses.

Re: Home insurers are dropping customers based on aerial images

#426

Post by PaulDavisThe1st »

tptacek wrote: post #317
RomanAlexander wrote: post #315

Earlier quoted context omitted.

Wouldn't said trampoline simply not be covered by the policy since you lied about it? The agents are checking a box and the underwriter is sticking in a boilerplate "Customer said no trampoline therefore trampolines are excluded from this policy" text

It depends on the policy, but either way, this is the kind of risk we're talking about managing with culls: trampolines, and bad roofs. I pay to keep my house up. You (say) don't. Why should I be OK with subsidizing your resulting claims with higher rates? I think there's a sort of weird subtext in the "risk pooling" discussions on this thread that "risk pooling" is a way for people who don't replace their old roofs…

You seem to be forgetting that this avoidance can work at two times:

1. pre-emptively dropping or refusing coverage

2. claim inspectors concluding the company has no liability for a particular incident.

It doesn't all need to be #2 (and probably should not be), but it also doesn't all need to be #1 either.

Re: Home insurers are dropping customers based on aerial images

#427

Post by firesteelrain »

tptacek wrote: post #345
imgabe wrote: post #338

Earlier quoted context omitted.

I think the issue is that in some cases the information is inaccurate and there are sometimes limited avenues for a customer to object if their insurance is cancelled based on inaccurate information. To the extent that the information is accurate, I agree. If you make an agreement with a company and buy insurance based on your statement that you don't have a pool, but then you do have a pool, I don't see any reason w…

They can generally decline coverage for any reason, for what it's worth; they could cancel without aerial footage just on the hunch that you didn't replace your roof, or they could mass-mail their customers demanding proof of roof replacements. (The article and other things I'm reading suggest that cancellations are because footage finds trampolines and pools --- in which case I don't even understand how anybody can…

Some insurance companies will allow trampolines -- at a cost. We had to get rid of ours because the cost and liability just wasnt worth it.

Re: Home insurers are dropping customers based on aerial images

#428

Post by firesteelrain »

RomanAlexander wrote: post #315
tptacek wrote: post #310

Earlier quoted context omitted.

You (say) have a trampoline. I do not. We share an insurer. Our insurer asked, when you applied, if you had a trampoline. Your trampoline materially increases the risk that insurance is going to have to pay to cover a lawsuit on your property. You lied, and said you didn't. I am now paying to subsidize your trampoline. Why shouldn't I want them to be running drones over our houses? Worrying times... for pirate trampo…

Wouldn't said trampoline simply not be covered by the policy since you lied about it? The agents are checking a box and the underwriter is sticking in a boilerplate "Customer said no trampoline therefore trampolines are excluded from this policy" text

It increases the chance of a claim against the homeowner insurance if a neighbor's kid gets injured on your property. Even if it ultimately will be on you, the insurance company will likely get sued and may settle which increases costs. They'd rather go the cheaper, drone surveillance route to find offenders early and warn them or else.

Re: Home insurers are dropping customers based on aerial images

#429

Post by PaulDavisThe1st »

tptacek wrote: post #402
el_benhameen wrote: post #391

Earlier quoted context omitted.

I saw one case where a guy was dropped because of an aerial photo of a pile of junk in his yard. I’ve had piles of junk in my yard during various remodeling projects. If the satellite passes over the day before the dump run, there’s no way to tell that the junk was gone the next day. If there’s an inspection, it’s easily explained. I suppose you could offer an explanation for the satellite photo, but in that case you…

You're supposed to notify your insurer when you remodel!

Given that my insurer has never once stepped foot in any property of mine they've ever insured, the idea that I have to tell them when I replace the tiles in the bathroom seems a little ... crazy.

Obviously, if I add rooms or extend vertically, they need to know. But "remodel" covers a lot.

Re: Home insurers are dropping customers based on aerial images

#430

Post by firesteelrain »

skissane wrote: post #378
tptacek wrote: post #374

Earlier quoted context omitted.

Look, I hear you, but at some point this has to be on you. The CPSC has a thing dedicated to trampolines. The Mayo Clinic has articles about it. It is a huge cause of injuries of minors around the country. I'll grant that this is slightly more obscure an issue than swimming pools, but there are tons of swimming pool buyers who would make similar claims ("nobody told me swimming pools were that risky, this is just fin…

Well, I'm not in America, and I'm wondering if this is an American thing? I just checked my insurance policy. The word "trampoline" never once occurs in it. I don't think my insurer cares about trampolines. If I think about it: given the absurdly large payouts for some injury lawsuits in the US, I understand why American insurers might be particularly sensitive to things that might induce injury, like trampolines. Gi…

It is an American thing and the WSJ is generally American articles so you are going to get a lot of American-related responses.
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