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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

#581

Post by PurestGuava »

Too wrote: post #529
Noumenon72 wrote: post #516

Earlier quoted context omitted.

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 ca…

Commercial insurances will also often pay for risk improvement works and assessments for their customers' businesses on the basis that it will reduce the incidences of claims and/or reduce the cost of claims if they do arise.

> 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.

This is part of the theory behind the Affordable Care Act and its subsidies, in that the more people who have health insurance, the bigger and more diverse the pool, it becomes a win-win-win for insurers (bigger pool = good, more money, more customers, more profit) consumers (health insurance = healthier, better life) and the government and country overall (healthy population = better long term prospects for the country).

Of course, true universal healthcare programmes like the NHS simply abstract that away by removing the profit incentive entirely, cutting the insurers out of the equation and turning it into a more straightforward "the government pays for healthcare because a sick population is just a plain bad thing". It's as such not really a "risk pool" or "insurance" in any real sense, because the amount you pay into the system is completely disconnected from your risk of drawing out of it (and indeed, given the correlation of poor health and low income, likely inversely proportional).

Re: Home insurers are dropping customers based on aerial images

#582

Post by PurestGuava »

Too wrote: post #532
AdieuToLogic wrote: post #510

Earlier quoted context omitted.

> At the risk of being callous, the goal of home insurance is to assess and manage risk. No, risk assessment and/or management is an internal operational concern. The goal of insurance providers, home or otherwise, is to charge fees such that the insurer collects as much revenue as possible while simultaneously expending as little as possible to remedy claims. Any justification legally available to an insurer support…

If your insurers goal is revenue i suggest you go look for a new mutual insurance. (no, this is not some hippie collective thing, in many countries this is the norm, see https://en.wikipedia.org/wiki/Mutual_insurance )

An insurance mutual's goal is still revenue. Your own link spells it out - it still tries to make a profit, it's just that whatever profit arises gets redistributed to policy holders or others. It still has to respond to commercial pressures and the need to run a sustainable business in the same way as any firm.

It's a common misconception that co-operatives/mutuals somehow don't need to make money or will actively try to not make money, but in reality if they don't they tend to die fairly quickly.

Re: Home insurers are dropping customers based on aerial images

#583

Post by PurestGuava »

bilegeek wrote: post #433
trogdor wrote: post #369

Earlier quoted context omitted.

Businesses want to maximize profits, but an insurance company that doesn’t pay claims will quickly have no customers.

Except for the mandated ones, like car insurance.

In the UK, car insurance companies have actually been loss-making recently, despite car insurance being mandatory. It's not a guarantee of profit, especially not given how hyper-competitive the car insurance market is here.

Re: Home insurers are dropping customers based on aerial images

#584

Post by jajko »

brewdad wrote: post #284
gumby wrote: post #143

Earlier quoted context omitted.

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.

More than that, you can choose to go without a credit card. Insurance is mandatory for most people. Either the law requires it or a lender requires it in order to approve the loan. Insurance rates are regulated for the same reason most states regulate utility rates. You can’t really opt out and the markets where price regulations have been removed have left most consumers worse off.

Not a good comparison - you can also choose to go without buying a house, its a very US thing to measure success in life with such (massively incorrect) yardstick.

Re: Home insurers are dropping customers based on aerial images

#586

Post by rileymat2 »

madsbuch wrote: post #561
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…

In the framework of GDPR (which I know is not applicable in the US) you have the legal mandate to ask them to correct information about you. I think that is very reasonable law: If n organisation makes decision about your relations, you should be able to force them to process correct information. (I have used that clause ones, when a bank wrongly reported that I had an open account of a certain type, which resultet i…

Does it cover information about something about you?

For example the insurance company had the correct address for the person (no need to correct) but the wrong information about the location of the address.

Re: Home insurers are dropping customers based on aerial images

#587

Post by Retric »

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.

Someone with both is more likely to have a bathtub related death. 341 people died by drowning in bathtubs + 70 scalding deaths + unknown number of falls vs 2 deaths from trampolines. ~3 million trampolines in the US.

The risk of being sued is very different though.

Re: Home insurers are dropping customers based on aerial images

#588

Post by [deleted] »

datascienced wrote: post #542
vba616 wrote: post #386

Earlier quoted context omitted.

>that requires capital - more than the average owner really has access too It sounds odd to my ear to matter-of-factly state that the US is deprived due to being capital-poor. I mean, I'm not disputing anything specific, but where do middle-class people have better access to consumer finance than the US? If you'd asked me what single fact represents American homeowners to people interested in economics around the wor…

Who is on the losing side of interest rates going up while 30 year fixers are presumably paying something like 2%?

[deleted]

Re: Home insurers are dropping customers based on aerial images

#589

Post by paulcole »

hattmall wrote: post #526
paulcole wrote: post #411

Earlier quoted context omitted.

> 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.

No, it definitely is. If nobody accounts for it, it means it’s not a risk worth accounting for. But it’s still a risk.

Re: Home insurers are dropping customers based on aerial images

#590

Post by madsbuch »

rileymat2 wrote: post #586
madsbuch wrote: post #561

Earlier quoted context omitted.

In the framework of GDPR (which I know is not applicable in the US) you have the legal mandate to ask them to correct information about you. I think that is very reasonable law: If n organisation makes decision about your relations, you should be able to force them to process correct information. (I have used that clause ones, when a bank wrongly reported that I had an open account of a certain type, which resultet i…

Does it cover information about something about you? For example the insurance company had the correct address for the person (no need to correct) but the wrong information about the location of the address.

I reckon you can argue that they store and use wrong coordinates about the place you reside, which would indeed be illegal - just like it would be illegal to store a wrong address of where your reside.
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