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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

#661

Post by tekknik »

remram wrote: post #625
seanmcdirmid wrote: post #406

Earlier quoted context omitted.

> 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?

If Google is right 98% of the time, companies might find it not worth the cost to develop and use a better system, leaving the 2% of people caught in the crack unable to get basic services as all companies go off of Google's data. This is a huge fairness problem.

This problem exists across the board, and it’s due to people using, and in some cases abusing, statistics. Instead of using statistics/probability to answer questions, we should instead not use it at all or have a limit on how much a decision can be made based on chance.

Re: Home insurers are dropping customers based on aerial images

#662

Post by tekknik »

Spooky23 wrote: post #629
rlt wrote: post #549

Earlier quoted context omitted.

I don’t understand how states like California don’t understand basic economics.

They do. HN commenters often over simplify complex issues.

They are not oversimplifying it. The law says they can’t use forward looking projections, only historical data to build rates. Coupled with climate change the CA insurance commission certainly doesn’t understand economics and they’ve created a recipe for failure.

Re: Home insurers are dropping customers based on aerial images

#663

Post by tekknik »

cyanydeez wrote: post #604
seanmcdirmid wrote: post #563

Earlier quoted context omitted.

California is one of the capitalistic states out there. But they have politicians, government, regulation, like any other state. Insurers are also rapidly leaving Florida, so it might not just be about regulation, or those two states do lots of regulation, or something in between.

Its about reality. Both states should be.preventing public housing where reoccuring signifixant hazards effect populations. Instead, they.try to manipulate the insurance market.

You have to define reoccurring and significant. Much of CA is on a fault line, so should everybody move to the desert where it’s scorching hot but a bit safer?

Re: Home insurers are dropping customers based on aerial images

#664

Post by tekknik »

revlolz wrote: post #601
mh- wrote: post #546

Earlier quoted context omitted.

>That really is what a competitive insurance market should be like right? Should be. But states like California cap insurance rates in such a way that insurers are dropping (non-renewing) policies, since they can't charge market rates.

It's because California pushes their FAIR plan which is expensive and has terrible coverage. It's a corrupt and unethical solution for the state to recoup its budget deficit.

They’re losing money on it actually but you missed the obvious. Liberals want everything privatized to remove profit incentive. That’s the reason they’re creating a uncompetitive environment, to kill business. For further proof, see the recent minimum wage increase.

Re: Home insurers are dropping customers based on aerial images

#665

Post by tekknik »

derwiki wrote: post #511
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…

Reminds me of a few years back when my dad tried to get ATT DSL for my grandpa’s house. ATT told him they couldn’t find his address with their system. My dad reminded ATT they had a landline through ATT for fifty years. “Sorry, different system.” Got cable internet instead.

This is curious. Is it because they hadn’t upgraded the lines out to the residence? I had always understood DSL used existing phone lines.

Re: Home insurers are dropping customers based on aerial images

#666

Post by tekknik »

mvc wrote: post #556
firesteelrain wrote: post #427

Earlier quoted context omitted.

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.

So in the richest country in the world parents can't let their kids play on trampolines because a neighbours kid having an accident on one would bankrupt their insurance company. Meanwhile, toddlers do active shooter drills like they are fire alarm drills. Totally logical country you got there with a perfectly reasonable approach to risk.

Hmm, when I was a kid while at my friends house I had a small statue fall on my head from a bookshelf. I still have the mark from it. My parents were informed, and with two of them nurses they decided to just watch me for concussion. My parents didn’t sue them, just chalked it up to accident. A friend of mine broke their arm on another friends giant trampoline. Again, no lawsuit. These days parents will sue their child’s best friends parents for something like that. So perhaps there’s something different with modern Americans that has made them more likely to piss on their neighbors?

Unfortunately this is the normal ebb and flow of populations. And the stage the US is at we just have to wait for severe economic disaster to remind people what trauma is.

Re: Home insurers are dropping customers based on aerial images

#667

Post by throwaway2037 »

Arn_Thor wrote: post #530
throwaway2037 wrote: post #467

Earlier quoted context omitted.

> 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)

    > tell the regulators
You write a letter -- takes about 15 minutes. Or send an email. Simple. And it works.

Re: Home insurers are dropping customers based on aerial images

#668

Post by tekknik »

paulcole wrote: post #589
hattmall wrote: post #526

Earlier quoted context omitted.

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.

Fellow renter here, what avenues do you have if your renters insurance is cancelled? You don’t have the risk of the main building, but what if your unit suddenly becomes a fire hazard area and you’re dropped?

You’re (and I) are an idiot for renting because after you’re done renting you have no equity. Now compare the rental and mortgage similarly sized units and you’ll realize for about 20% more money you’re suddenly not igniting it on fire every month.

Re: Home insurers are dropping customers based on aerial images

#669

Post by datascienced »

datascienced wrote: post #545
danans wrote: post #492

Earlier quoted context omitted.

Also, consider that for a great many Americans, their house is the only significant asset they have. A huge number of Americans have no retirement savings at all [1]. For some of these people who do own a house, selling it at retirement is the only way they can avoid poverty (or at least maintain their quality of life), especially with the possibility of a future government significantly cutting Social Security benef…

Probably why it is smart to buy a property where most of the value is the land. If you can!

Not sure why the downvie guys!

Say you buy a $800k prop but $400k is land value. Layer it is $1.6m of which $1m is land value. They can huff and puff and blow your uninsured house down, and you now have a $1m development lot.

Now clearly it is better to be insured, but insurance doesn’t always come through so this is a hedge.

tldr; location cubed

Re: Home insurers are dropping customers based on aerial images

#670

Post by mb7733 »

dragonwriter wrote: post #653
mb7733 wrote: post #528

Earlier quoted context omitted.

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 in…

> If you dispense with insurance entirely, how do you deal with catastrophic expenses? If insurance can accurately predict losses that will occur and price accordingly, you are paying exactly the same amount plus overhead, on a similar schedule for insurance as directly paying for losses yourself without insurance. The cost spreading effect (both over time and over individuals) is a direct consequence of the inabilit…

> If insurance can accurately predict losses that will occur and price accordingly, you are paying exactly the same amount plus overhead, on a similar schedule for insurance as directly paying for losses yourself without insurance.

The hypothetical that I'm working with is that the insurer can perfectly price insurance by perfectly estimating the _risk_ or _expected loss_ for each individual customer. They can then pool this risk, take a profit, and everyone wins.

This is what I assumed you meant by "perfectly priced insurance". But I've realized you're talking about the case where insurer has perfect knowledge of the future losses each individual will take. I agree in this case insurance will not make sense. Insurance would be free for most individuals and impossibly expensive for those doomed to catastrophe. (The latter group would be screwed, even if they shared perfect knowledge of the future with the insurer.)

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