> It doesn't seem to me that customers would see full value of their "purchase" if they have never had a claim. If you think about Guevara's insurance as capit

> It doesn't seem to me that customers would see full value of their "purchase" if they have never had a claim. If you think about Guevara's insurance as capital expenditure (by describing it as a purchase) then, sure, you're right, losing some of it because of someone else's accident triggers our human aversion to loss. But, the trick there is that while Guevara's insurance can be described as capital expenditure, conventional insurance is always operational expenditure. With conventional insurance you're not buying your insurance, you're only renting it. At the end of the year you have nothing. > Why not build a model that assumes people are bad drivers by default and optimize from there? I think Guevara's model is as close to that as it's possible to go. By moving an acceptable degree of the financial repurcussions for accidents onto you and your social group, Guevara is stepping back from needing to care directly about who is and who isn't a good driver. For example, if there were a way let a group choose their own prices, or pay flat prices, then (in theory at least) Guevara would be able to entertain that idea. Pricing matters for Guevara in terms of customer acquisition, and in terms of making things feel fair for your group-mates, but other than that it's not a big issue. Insurers care about pricing so much they're putting tracking devices in peoples cars to understand their driving patterns. They need to get more and more and more data because they're ultimately trying to predict the future. Guevara doesn't need to do that.