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

Re: Home insurers are dropping customers based on aerial images

#521

Post by tptacek » Sun, Apr 07, 2024, 4:42 AM UTC

barrysteve wrote: post #504

tptacek wrote: post #294

I don't really understand the privacy concern here. To wit: insurers can demand actual inspection of your home when making underwriting decisions. The condition of your house is very much their business. Why is an aerial photograph of your roof, which everybody in the world already has on Google Maps, such a big deal?

Demanding an inspection is a process that can be organized and scheduled around. Your friend brings over a trampoline for Timmy's birthday party, you can take the risk of injury with no intent to claim on insurance. You can remove it before inspection. Now you get pinged out of the blue by a satellite. Adults don't need constant supervision. Should you believe they do, why not leave a multi-camera drone above your su…

You can remove it before inspection

Yes, if they do a scheduled inspection, it is easier to defraud them.

Re: Home insurers are dropping customers based on aerial images

#522

Post by thfuran » Sun, Apr 07, 2024, 4:52 AM UTC

tptacek wrote: post #497

Retric wrote: post #458

Earlier quoted context omitted.

Bathtubs are dangerous, being dangerous isn’t the only criteria here.

Ok, well, we've reached an argument that is dispositive for people who think trampolines are no more dangerous than bathtubs.

And for people who aren't deliberately missing the point.

Re: Home insurers are dropping customers based on aerial images

#523

Post by mb7733 » Sun, Apr 07, 2024, 4:59 AM UTC

imgabe wrote: post #329

gmd63 wrote: post #21

Earlier quoted context omitted.

Insurance incentives would drive them to want to predict as accurately as possible who is going to cost them money, and then deny them coverage. They make money from selling to people who are afraid of a calamity but likely won't experience one.

At some point the cost of insurance would approach the cost of simply self insuring. Why should I pay the insurance company to maybe replace the roof if I can just keep $20k in a savings account in case I need to replace the roof?

First of all: the payout you get from insurance does not come only from the premiums you personally pay. If you make a claim, your expenses are covered by the pool of money of all customers, even those that do not make any claims.

Second of all: when you take out an insurance policy and pay your first premium, you are immediately covered. If you are "self insuring" by setting aside the same amount monthly, it will take you a long time to even begin to accumulate enough funds to cover yourself in case of catastrophe. (And due to the first point, you may never reach that point.)

Finally, yes, of course, there is no need to take out an insurance policy for a risk that you can afford to pay out-of-pocket. It's like how if you have the cash to pay for a house, there is no need to take out a mortgage.

Re: Home insurers are dropping customers based on aerial images

#524

Post by dannyw » Sun, Apr 07, 2024, 5:05 AM UTC

harimau777 wrote: post #495

potatolicious wrote: post #449

Earlier quoted context omitted.

> "If a group of ten people all have a one in one-thousand per year chance of a million-dollar loss each year" More importantly, each person in this group has a different chance of a million-dollar loss each year, and it's important if you're going to write a policy to get that chance as accurate as possible. Some members of the pool have a 1-in-1000 chance per year, others have a 1-in-10 chance. An efficient insuran…

Wouldn't an efficient insurance market be worthless since the expected net payout for everyone insured would trend to zero?

Generally insurance premiums are invested into relatively safe assets, like bonds, which yield quite a bit right now.

Re: Home insurers are dropping customers based on aerial images

#525

Post by hattmall » Sun, Apr 07, 2024, 5:05 AM UTC

everybodyknows wrote: post #399

tptacek wrote: post #345

Earlier quoted context omitted.

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…

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.

It's up to them to make their own risk assessments. There's a lot of press when claims get denied but it's not as common or as easy as complainants make it seem. Especially when it comes to roof replacements. That's been a heavily exploited point as well. Lots of shady operators chasing storms.

Re: Home insurers are dropping customers based on aerial images

#526

Post by hattmall » Sun, Apr 07, 2024, 5:11 AM UTC

paulcole wrote: post #411

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…

> there are sometimes limited avenues for a customer to object if their insurance is cancelled based on inaccurate information. This is part of the risk one takes buying property. It’s more than offset by the benefits of buying property. Or else everyone wouldn’t be telling me what an idiot I am for renting.

No, it's definitely not. No one accounts for the risk of being rejected due to inaccurate information. It doesn't even make sense to do so because the nature of the probability isn't definable.

Re: Home insurers are dropping customers based on aerial images

#527

Post by windexh8er » Sun, Apr 07, 2024, 5:12 AM UTC

barrysteve wrote: post #504

tptacek wrote: post #294

I don't really understand the privacy concern here. To wit: insurers can demand actual inspection of your home when making underwriting decisions. The condition of your house is very much their business. Why is an aerial photograph of your roof, which everybody in the world already has on Google Maps, such a big deal?

Demanding an inspection is a process that can be organized and scheduled around. Your friend brings over a trampoline for Timmy's birthday party, you can take the risk of injury with no intent to claim on insurance. You can remove it before inspection. Now you get pinged out of the blue by a satellite. Adults don't need constant supervision. Should you believe they do, why not leave a multi-camera drone above your su…

I'm sorry but this comment makes no sense. Where did you get that insurance companies are now "surveiling you 24/7"?

If my insurance goes up, and it has, because of people defrauding insurance companies then I would fully expect my insurer to protect their bottom line and my rates by dropping those customers playing unfairly.

What I don't agree with is insurance companies punting the decision making process to an algorithm. At that rate we end up with Google "support" from a company that, as paying customers, we should be able to have a conversation with.

The last thing I'll mention is that it goes a long way to know your insurance broker. As an example I've known mine for the last ~15 years and they have helped remediate a number of, what I'll describe as standard process issues, when I've contacted them and in a few cases even proactively.

Re: Home insurers are dropping customers based on aerial images

#528

Post by mb7733 » Sun, Apr 07, 2024, 5:16 AM UTC

dragonwriter wrote: post #372

shepherdjerred wrote: post #256

Earlier quoted context omitted.

That wouldn't be pointless, because you would have a predictable expense instead of an unpredictable expense. What you're describing is actually the ideal scenario for both individuals and companies.

> That wouldn't be pointless, because you would have a predictable expense instead of an unpredictable expense. What you're describing is actually the ideal scenario for both individuals and companies No, if the expense were that predictable, the best case would be dispense with insurance entirely, since it effects the cost not at all and imposes overhead, especially insurance where the rates are accurately computed…

If you dispense with insurance entirely, how do you deal with catastrophic expenses? The key things I think you are not considering are:

1. If you choose not to take out an insurance policy, and instead save the money yourself, you will not have the lump sum immediately available to cover catastrophe. Whereas as soon as you start paying insurance premiums you are covered.

2. The payout you receive when you make an insurance claim does not just come from the premiums you have personally paid. In fact, for a rare event, the size of the payout likely exceed the total cost of all premiums you could pay over your entire lifetime. This is because the risk is pooled over all customers, and not all customers will make claims.

Neither of the above 2 points become any less relevant as the insurance premiums become more and more accurately priced.

Re: Home insurers are dropping customers based on aerial images

#529

Post by Too » Sun, Apr 07, 2024, 5:16 AM UTC

Noumenon72 wrote: post #516

shpx wrote: post #503

Earlier quoted context omitted.

If insurance was just about pooling risk, an insurer that had perfect information about the future would pool everyone into a one-man pool and charge everyone the price of their damage for the year +1 cent for itself. But that's not what would happen. You would still have insurance because what we really have is 8 billion people in the world (or 300 million in America or 10 million in your state or 1 million in your…

I invite you to start selling an insurance product whose sales pitch is "You will get some utility from this product paying for other people's roofs!" Is there some kind of theory of insurance they teach in business class where they explain this "discover the network" idea? It doesn't sound like the common definition of insurance at all. I believe the perfect information case you say wouldn't happen is exactly what w…

There are actually insurances that to some degree work proactively to reduce the risk of all its members in the pool.

My home insurance offer free pest-control, because they know that if this is neglected, it will cost a lot more for them. Plus, it will be hard to prove that it was a cause of the home owners neglect.

At the risk of getting political, (governmental) healthcare is another one, where regular checkups can save you thousands in repair. It might look like a subsidy but in the end it becomes a net-benefit for everyone in the pool.

Re: Home insurers are dropping customers based on aerial images

#530

Post by Arn_Thor » Sun, Apr 07, 2024, 5:19 AM UTC

throwaway2037 wrote: post #467

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…

> if their insurance is cancelled based on inaccurate information I see this type of comment on HN too often. Some hypothetical bullshit scenario followed by a BIG if. Armchair quarterback type of comment. In all highly advanced countries (G7 and similar), insurance is insanely strictly regulated. If they cancel your policy for a b/s reason, and your protests are ignored, then tell the regulators. They will fix it qu…

I suspect very few customers have the wherewithal and time and effort to “tell the regulators”. (Who, to issue a fine, would have to show malfeasance so the customer needs to produce evidence of the interaction sufficient to show the insurer broke the law)