Anthropogenic Global Warming ... how hot is it ?

[Rigby5]

Perhaps. BUT !
a) To accumulate such $buffer would require over-charging by the amount needed to accumulate the amount you have in mind.
b) As S2 observed, the insurance bidness is competitive. So if one insurer does that, and a different insurer doesn't, the latter insurer will have lower premiums, and thus a competitive advantage in the insurance market.

The idea is that when the money is not used due to claims, then the insurance company takes it as profit.
And what I am suggesting is that the insurance company then is not really providing anything, and is worthless.
Instead, the people should simply share a risk pool they agree upon how much they should all put in.
There is no point to allowing a company to take this pooled money reserve as profit.
The insurance company does not prevent the events that lead to claims, so they are essentially worthless.
It is the people making payments who provide all the money when there is a claim.

 

[sear]

"The idea is that when the money is not used due to claims, then the insurance company takes it as profit.
And what I am suggesting is that the insurance company then is not really providing anything, and is worthless." R5 #481

My experience with applied statistics suggests to me while many insurance policy holders may never have a major claim, such as - my house burned down, all that's left is a broken bidet and a tennis racket, -
for an insurer of industrial size, the month to month operation costs are fairly stable. There may be a spike higher or lower here or there, but they're probably well within 3 sigma (I'm guessing).

Is a seatbelt "worthless" unless it keeps you from hurtling through the windshield into the grill of the truck that would otherwise have killed you?
Is a spare tire "worthless" unless it's twirling on the axle?

Seems to me insurance is about contingency. Hope for the best, but prepare for the worst.

"Instead, the people should simply share a risk pool they agree upon how much they should all put in.
There is no point to allowing a company to take this pooled money reserve as profit.
The insurance company does not prevent the events that lead to claims, so they are essentially worthless.
It is the people making payments who provide all the money when there is a claim." R5

It's a government regulated industry. Perhaps you're misunderestimating the administrative costs of holding a policy, even when there's no claim.

 

[Rigby5]

My experience with applied statistics suggests to me while many insurance policy holders may never have a major claim, such as - my house burned down, all that's left is a broken bidet and a tennis racket, -
for an insurer of industrial size, the month to month operation costs are fairly stable. There may be a spike higher or lower here or there, but they're probably well within 3 sigma (I'm guessing).

Is a seatbelt "worthless" unless it keeps you from hurtling through the windshield into the grill of the truck that would otherwise have killed you?
Is a spare tire "worthless" unless it's twirling on the axle?

Seems to me insurance is about contingency. Hope for the best, but prepare for the worst.


It's a government regulated industry. Perhaps you're misunderestimating the administrative costs of holding a policy, even when there's no claim.

The seat belt costs about $30.
The spare tire about $100.
The fire insurance costs more $50,000, with fewer than 1% of homes ever having fires.
The administrative costs of insurance policies seem pretty much nil.
They just take your money unless you ever file a claim, and neither require any significant staff of expertise.

 

[sear]

"The seat belt costs about $30.
The spare tire about $100.
The fire insurance costs more $50,000, with fewer than 1% of homes ever having fires.
The administrative costs of insurance policies seem pretty much nil.
They just take your money unless you ever file a claim, and neither require any significant staff of expertise." R5 #483

We're in luck!
If the insurin' bidniss is inadequately regulated, the king of the planet can get out his DOGE chainsaw and fix it.

I'm not disputing your figures. But I suspect there's more to it than that.

 

[Rigby5]

We're in luck!
If the insurin' bidniss is inadequately regulated, the king of the planet can get out his DOGE chainsaw and fix it.

I'm not disputing your figures. But I suspect there's more to it than that.

Insurance used to not be a popular thing until 1957 when the IRS decided to allow employers to be able to write off employee benefits like health insurance.
Since then, insurance companies have used their vast assets to create horizontal and vertical monopolies.
So then yes, its a question of needing more regulation.

 

[Shiftless2]

The fire insurance costs more $50,000, with fewer than 1% of homes ever having fires.

How many homes do you know where the insurance premium is more than $50,000. A friend of mine used to head up the underwriting department of a company that specialized in truly high end homes - the ones where the premium was in that order of magnitude were rare but usually had features like an indoor pool for when the weather was too cold to use the outdoor one and so forth.

As an aside, homeowners insurance covers a lot more than fires.

The administrative costs of insurance policies seem pretty much nil.

How to say that you know nothing about insurance without saying you know nothing about insurance.

They just take your money unless you ever file a claim, and neither require any significant staff of expertise.

You really have to learn something about insurance and operating an insurance company.

 

[Rigby5]

How many homes do you know where the insurance premium is more than $50,000. A friend of mine used to head up the underwriting department of a company that specialized in truly high end homes - the ones where the premium was in that order of magnitude were rare but usually had features like an indoor pool for when the weather was too cold to use the outdoor one and so forth.

As an aside, homeowners insurance covers a lot more than fires.


How to say that you know nothing about insurance without saying you know nothing about insurance.


You really have to learn something about insurance and operating an insurance company.

We are talking about the total cost, not just the annual premium.
Insurance has never covered much of anything in my experience.
They even try to claim that hurricanes and forest fires are not covered, as "acts of god".

 

[Shiftless2]

Instead, the people should simply share a risk pool they agree upon how much they should all put in.

Ever heard of Lloyds of London - started in a coffee shop doing exactly that.