5 ms·

Whilst the security lapses are infuriating, I think this is really a domain for independent insurance cover.

by 7952 7y ago

Thorrez 7y ago
I would want to buy that insurance from the bank. If I buy the insurance from somewhere else, then the bank doesn't really have a financial incentive to keep my stuff safe.
- H8crilA 7y ago
  Meaning the insurance premium will be higher? I mean if X keeps it, Y insures it, then X loses it, Y still has to pay up, so you're covered. The only difference between X=Y or X!=Y could be in the premium that Y commands.
  - Thorrez 7y ago
    Yeah, I would expect the premium to be higher if the insurer knows there's not much incentive for the bank to protect the item. Also I consider a loss and insurance payout to be worse than no loss and no payout. Because it's a hassle to do the paperwork and rebuy items. And there might be sentimental items that a payout doesn't fully replace. So it's best to have a system that reduces the chance of a loss.
  - 7952 7y ago
    And in all likelihood the insurance will be provided by another company and sold by a different department.
- dredmorbius 7y ago
  I don't think you do. You want the risk (bank malfeasance) and risk manager (insurance company) widely separated (agency risk, moral & morale hazard, conflicts of interest, etc.). The insurer should demand and receive rights to collect damages from the bank. The bank itself can insure that risk independently.
  - Thorrez 7y ago
    >The insurer should demand and receive rights to collect damages from the bank. If that's possible then yes, that's great. But it sounds like banks refuse to do that. Some banks cap their liability at $500, or $25,000, or 10x annual rent, or 500x annual rent.
    - dredmorbius 7y ago
      Banks' leverage negotiating with single customers is far higher than that with insurance carriers. I suspect terms would swing to the customers' favour.
- kurthr 7y ago
  Exactly, otherwise the insurer makes more profit at higher risks. As long as all the bank deposits are equally unsafe a group of private insurers can all charge a %... why wouldn't they improve long term returns by just subsidizing thieves learning cracking skills as long as the effects are evenly distributed? Remember all those stero install places in the 80s-90s that also installed alarms? What other job were the installers trained for if they quit?
  - zrobotics 7y ago
    How does the insurer profit more if the risk is higher? Higher risk means there is a much better chance that an insurance policy will pay out, the ideal for an insurance policy is a low risk of having to pay on the policy.
    - kurthr 7y ago
      Because insurance prices are higher, and they make a percentage of the total payouts. All the insurers make the same actuarial calculations so there's no significant difference in pricing between them. All the banks pay the same insurance price and pass it on, because none of them care about security of your goods or information (according to the parent).
      - zrobotics 7y ago
        Interesting; I could never stomach actuarial textbooks well enough to gain much more than a high-level view of this industry. So higher-price policies are higher profit? I had always assumed the higher prices reflected the higher risk to the insurer, and even in a competitive market I would assume that the profit margin per policy would be roughly comparable between different types of policies.
Bluecobra 7y ago
I recently rented a self storage unit and they required that I have insurance (theirs or my homeowners). I don’t see much difference between a safe deposit box is and a self storage unit. I’m surprised the banks don’t require this—it would be less hassle for them and the customer. That being said, it should be obvious to the customer that insurance is needed. Actually reading the lease agreement should provide enough information on determining your insurance requirements. If Wells Fargo only caps their liability at $500, then you should have a policy to cover the rest. The laughable $500 liability really goes to show you they don’t care and don’t stand behind their product.
- kd5bjo 7y ago
  At one point, I tried to rent a vehicle space at a self-storage facility (in the US). The lease had a clause that I would not store anything worth more than $1000; had I gone through with the rental and left my car as I had planned, I would have been in instant violation of the lease agreement.
city41 7y ago
Insurance is best when covering replaceable things: cars, houses, etc. Had this guy had insurance, he’d likely have been compensated (for sure better than nothing), but would still be without his watches.
- otterley 7y ago
  In this particular instance, the victim was collecting these items not for their sentimental value, but for their monetary value, as he was planning to fund his retirement with them. So here, I suspect the victim would have been compensated fairly -- and reasonably satisfied to receive payment -- in cash, as opposed to replacement of the lost items.

Whilst the security lapses are infuriating, I think this is really a domain for independent insurance cover.

by 7952 7y ago

Whilst the security lapses are infuriating, I think this is really a domain for independent insurance cover.

I would want to buy that insurance from the bank. If I buy the insurance from somewhere else, then the bank doesn't really have a financial incentive to keep my stuff safe.

H8crilA 7y ago
Meaning the insurance premium will be higher? I mean if X keeps it, Y insures it, then X loses it, Y still has to pay up, so you're covered. The only difference between X=Y or X!=Y could be in the premium that Y commands.
- Thorrez 7y ago
  Yeah, I would expect the premium to be higher if the insurer knows there's not much incentive for the bank to protect the item. Also I consider a loss and insurance payout to be worse than no loss and no payout. Because it's a hassle to do the paperwork and rebuy items. And there might be sentimental items that a payout doesn't fully replace. So it's best to have a system that reduces the chance of a loss.
- 7952 7y ago
  And in all likelihood the insurance will be provided by another company and sold by a different department.
dredmorbius 7y ago
I don't think you do. You want the risk (bank malfeasance) and risk manager (insurance company) widely separated (agency risk, moral & morale hazard, conflicts of interest, etc.). The insurer should demand and receive rights to collect damages from the bank. The bank itself can insure that risk independently.
- Thorrez 7y ago
  >The insurer should demand and receive rights to collect damages from the bank. If that's possible then yes, that's great. But it sounds like banks refuse to do that. Some banks cap their liability at $500, or $25,000, or 10x annual rent, or 500x annual rent.
  - dredmorbius 7y ago
    Banks' leverage negotiating with single customers is far higher than that with insurance carriers. I suspect terms would swing to the customers' favour.
kurthr 7y ago
Exactly, otherwise the insurer makes more profit at higher risks. As long as all the bank deposits are equally unsafe a group of private insurers can all charge a %... why wouldn't they improve long term returns by just subsidizing thieves learning cracking skills as long as the effects are evenly distributed? Remember all those stero install places in the 80s-90s that also installed alarms? What other job were the installers trained for if they quit?
- zrobotics 7y ago
  How does the insurer profit more if the risk is higher? Higher risk means there is a much better chance that an insurance policy will pay out, the ideal for an insurance policy is a low risk of having to pay on the policy.
  - kurthr 7y ago
    Because insurance prices are higher, and they make a percentage of the total payouts. All the insurers make the same actuarial calculations so there's no significant difference in pricing between them. All the banks pay the same insurance price and pass it on, because none of them care about security of your goods or information (according to the parent).
    - zrobotics 7y ago
      Interesting; I could never stomach actuarial textbooks well enough to gain much more than a high-level view of this industry. So higher-price policies are higher profit? I had always assumed the higher prices reflected the higher risk to the insurer, and even in a competitive market I would assume that the profit margin per policy would be roughly comparable between different types of policies.

Bluecobra 7y ago

I recently rented a self storage unit and they required that I have insurance (theirs or my homeowners). I don’t see much difference between a safe deposit box is and a self storage unit. I’m surprised the banks don’t require this—it would be less hassle for them and the customer. That being said, it should be obvious to the customer that insurance is needed. Actually reading the lease agreement should provide enough information on determining your insurance requirements. If Wells Fargo only caps their liability at $500, then you should have a policy to cover the rest. The laughable $500 liability really goes to show you they don’t care and don’t stand behind their product.

kd5bjo 7y ago
At one point, I tried to rent a vehicle space at a self-storage facility (in the US). The lease had a clause that I would not store anything worth more than $1000; had I gone through with the rental and left my car as I had planned, I would have been in instant violation of the lease agreement.

city41 7y ago

Insurance is best when covering replaceable things: cars, houses, etc. Had this guy had insurance, he’d likely have been compensated (for sure better than nothing), but would still be without his watches.

otterley 7y ago
In this particular instance, the victim was collecting these items not for their sentimental value, but for their monetary value, as he was planning to fund his retirement with them. So here, I suspect the victim would have been compensated fairly -- and reasonably satisfied to receive payment -- in cash, as opposed to replacement of the lost items.