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> The Paper later found out that many insurance companies have already fixed the loopholes that Li took advantage of to get rich. > The ones they checked with

> The Paper later found out that many insurance companies have already fixed the loopholes that Li took advantage of to get rich. > The ones they checked with now have a clause that says they will not be responsible for any payout should the insured, at the time of buying, already knows or reasonably deduces that the flight can be delayed anytime. What kind of clause is that?

vkou 6y ago
It's a bit like the clause about how you shouldn't be buying fire insurance for a house that is already in the process of burning down. It's not an unreasonable one.
- greatpatton 6y ago
  You analogy is incorrect as it would mean that she would buy the insurance when the flight is officially delayed. Here she is making a prediction, which may or may not be correct. It is exactly the same as when you are buying option or contract on the stock market. Here the issue is that the insurance company has a fixed premium which not based on the likelihood of delay. This is completely on the insurance side. Otherwise the stock market will have big issue if you apply the same analogy. This new clause is in effect a blanket one to not pay anything... if you pay for an insurance you have the conviction that the flight might be delayed... otherwise there would be no point to buy it....
  - roenxi 6y ago
    The insurance company isn't a math problem; they are offering an explicitly bad deal. They are offering insurance on the basis that they will make a profit. Making that explicit in the contact is reasonable. If somebody thinks they are making money out of their insurance contract it is probably fraud or very close to.
    - rswail 6y ago
      My understanding is that insurance companies operate on pricing the contracts to cover their potential losses while making profit on investing the insurance premiums.
      - Cogito 6y ago
        Insurance companies, depending on the company and the line of business, will aim to make both an underwriting profit and an investment profit. If it is a particularly high premium line, and especially if there is a lot of competition, it's more likely that the underwriting profit will be kept minimal or even negative, as the investment profit is so much more lucrative. This is common in the car insurance lines of business, for example. For retail insurers there are a lot of moving parts here, and they will often not hold much of the final risk, so can't make money from investment anyway. For example, the retailer (sometimes an underwriting agency) may be underwritten by some bigger insurer. That insurer may have a quota share arrangement with another insurer (I'll take 10% of the risk, you take 90%) with a corresponding premium share. At each level reinsurance is bought, sometimes on the whole portfolio of risks and sometimes on particular classes of risk or specifc policies, and the costs associated with the reinsurance are priced into the retail premium. Additionally, when working in an intermediated market with brokers, there are often credit terms of up to 90 days where no payments are made. Anecdotally, it does seem like some brokers do make a large amount of their money on this float. Adding it all together, there are two main numbers to track from an underwriting profit point of view - your loss ratio (claims incurred / earned premiums, often extended to include projections for future claims and premium for future insured periods) and your combined operating ratio (COR) which includes expenses. There will be a loss ratio at which a line of business becomes profitable, and final premiums are often calculated by taking the expected losses and grossing up by this loss ratio. For individual accounts it might literally be that simple - "over the last 5 years this account has averaged claims of $100,000 a year, we need a 60% loss ratio so the premium should be $166,667." If there are extra reinsurance costs you might add those, and you might also add a loading for large infrequent losses that aren't captured in your underlying loss ratio (and another loading for catastrophes, a level above that). The combined ratio needs to be under 100% to be 'underwriting profitable'. I've seen CORs as high as 105-110%, but typically those portfolios were being very closely monitored/remediated/exited. If there is a strong market the COR is allowed to drift higher, but when the market tightens so does the COR.
  - quietbritishjim 6y ago
    Perhaps it's more likely getting life insurance when you know you have a disease that is likely to be fatal (but not 100% guaranteed). Most life insurance policies would disallow that. At the very least they require you to disclose it, and if they still agree to insure you the premium would be much higher.
  - unishark 6y ago
    I'm guessing you don't have this woman's inside knowledge of the airline system in China. You're assuming here that a person can't reasonably know or deduce a flight will be delayed, but her track record says different. Sometimes, often in fact, it becomes pretty obvious a flight will be delayed but they just haven't bothered to officially announce the fact yet. Such as if the plane isn't even there because they are delayed on the previous leg, and boarding time is about to start. Or when the airport cancels all flights for an indeterminate time due to incoming bad weather and the airlines wait to update times because they don't know what to say yet.
    - inimino 6y ago
      A certain flight out of a certain airport (I won't say which one) was routinely delayed to the point that passengers waiting for the inevitable compounding series of delay announcements (always after the predicted departure time had passed, and before the plane had showed up much less been boarded) would make small talk about it. Predicting that these flights would be delayed every. damn. time. was not difficult. However, if the insurance companies eliminate this face-saving measure for airlines then they may be forced to be realistic rather than maximally optimist in their departure estimates in the future (or simply be blacklisted by these kinds of insurance).
    - greatpatton 6y ago
      Yes I do know by experience that it is very easy to deduce if a flight will be delayed. By experience in Europe, last leg of the day of an Easyjet flight -> 75% chance that your flight will be delayed. Snow during the night (look at the forecast) -> 90% your morning flight will be delayed etc. etc. No need for an advance ML model. Of course what she did was more like insider trading, but I'm pretty sure that you don't even need that.
      - user5994461 6y ago
        The difficulty to make money out of this might be to determine the delay with some accuracy, not just that there will be some delays. Flight are routinely delayed by tens of minutes (has a low-cost flight ever left on time?) and that won't award compensation. European laws define mandatory compensations when a flight is delayed or cancelled. This starts after 30 minutes if I remember well and depends how long the delay is and how long (distance) the flight is. Also, delay is measured on arrival time, not on departure time. Planes frequently depart late then arrive on time, because they fly faster to catch up.
  - notahacker 6y ago
    There's a big difference between buying a flight ticket and insuring it because of the possibility of its delay increasing your costs which you want to avoid and buying a flight ticket and insuring it because of the probability of its delay earning you a reward which you are actively seeking out in your choice of flights It's the difference between buying flood disruption insurance because you operate in an occasionally flooded area, and moving your stock to wherever there's a flood warning. Particularly in this case, where the woman cancelled her expected on-time tickets because the tickets had no value to her except as a source of insurance payouts. Consumer insurance is not exactly the same as stock options: it's not supposed to be a perfectly efficient market. Insurers are often operating under rules which prevent them from denying or repricing insurance due to relevant risk factors and likewise premium holders are usually bound by far more terms and conditions preventing them from taking actions which might change the value of their policy than stocks or futures markets.
- franciscop 6y ago
  As the sibling said "it would mean that she would buy the insurance when the flight is officially delayed" I think it's more like, you shouldn't buy fire insurance if you are having a bbq or similar. Or at least somewhere in the middle of these two statements.
- Cthulhu_ 6y ago
  You shouldn't be buying fire insurance if someone has said they were going to burn your house down. Or well you should, but if you wilfully had your house burn down anyway to get insurance money, that's insurance fraud.
- wastedhours 6y ago
  More like buying fire insurance for a house as you see an arsonist walking slowly toward it. You know what the expected outcome is going to be and are securing an agreement deliberately in bad faith. That's not to say insurance companies are always good faith actors (oftentimes not), but it's a very one-sided information flow.
  - SkyBelow 6y ago
    If there has been a rise in arson cases in my city that finally convinces me to get fire insurance, is that in bad faith? I have a reason to believe my house is now more at risk of burning down, so I'm buying insurance. It seems a much more realistic scenario than the one of having a arsonist slowly approaching a house (and even then, arsonist in general do not burn down most the buildings they approach throughout their lifetime, and even more so when you could individual approaches that result in arson). What about someone who notices that they are getting older and are starting to develop aches and pains and decides to start buying health insurance that they had avoided when they were younger because they seemed to have been made out of rubber back then?
    - wastedhours 6y ago
      The fact there's so many ifs and buts shows this can't be a clear line. In the eyes of the law, it's about the intent of the action - which is why the ambiguity at the Terms and Conditions level is probably for the best. Yeah, your first argument makes a lot more sense to normal situations, but mine was aimed at being an analogy to the example at hand from the article.
    - webmaven 6y ago
      > What about someone who notices that they are getting older and are starting to develop aches and pains and decides to start buying health insurance that they had avoided when they were younger because they seemed to have been made out of rubber back then? That's exactly the reason the ACA made health insurance mandatory, to avoid that scenario which would require insurance companies to make the policies more expensive in order to compensate for the higher average age and worsening average health of the insured pool, which further incentivizes the avoidance, and so on, until we're right back in the same situation with a high-risk pool and unaffordable premiums. Incidentally, that doesn't mean that avoiding health insurance if you are young and healthy with no dependents is actually a good idea at the outset, since many common health conditions like injuries from car accidents don't particularly discriminate by age.
csunbird 6y ago
This is extremely ambiguous, the insurance company may refuse to pay any insurer at all based on this clause.
- close04 6y ago
  This may be treated as "insider knowledge" but I expect the burden is on the insurance company to prove prior knowledge. But "reasonably deduces"... that can be used in any such case where mass payouts are a likely outcome. If I can "reasonably deduce" a payout will be needed than so can the insurance company. Under these conditions accepting my insurance purchase should be seen as the company committing fraud. They accept a payment knowing the customer can never collect.
  - rswail 6y ago
    Note that it's "reasonably deduces" at the time of buying the insurance contract. So it's not like the insurance company can say "you should have cancelled the night before because everyone could see the storm coming".
    - close04 6y ago
      I think I addressed it pretty clearly before. If a regular consumer can "reasonably" deduce (using logic, not some "illegal" insider knowledge) at the time of buying the insurance policy that the flight may be cancelled then the insurance company employing experts and very accurate statistical models can more than reasonably make the same deduction. Now since we agree that both parties deduced the flight will be cancelled but the company still went ahead and took the money for the insurance contract, this can only be fraud. The company took the money under false pretenses since they implicitly know even before the transaction that the claim is null and void under the "reasonable deduction" paragraph.
    - ErikVandeWater 6y ago
      The reason people buy flight insurance is because they reasonably deduce the flight might be cancelled.
ashtonkem 6y ago
One that is extremely narrow in scope. In this case, continual purchasing of insurance on the flights likely to be delayed would be evidence you knew it was going to be delayed.
- fendy3002 6y ago
  IMO, the problem is how to prove / what is the condition. Without clear condition / clauses, it is possible that they'll deny valid claims by saying that the insured has already know beforehand. Maybe there are more specific information?
WhompingWindows 6y ago
Is there any legal definition/precedent of "reasonably deduces"? Have companies attempted this kind of blockage before?
- dfxm12 6y ago
  There is a definition. https://www.trans-lex.org/902000/_/standard-of-reasonableness/ https://www.trans-lex.org/902000/_/standard-of-reasonablenes... https://en.wikipedia.org/wiki/Reasonable_person https://en.wikipedia.org/wiki/Reasonable_person That doesn't mean there's no grey area, though. Is it unreasonable to buy tickets and insurance under an assumed identity? Probably, but part of getting your day in court having the ability to suss this out.
zoomablemind 6y ago
I think the main point is about risk distribution. In a normal insurance contract the main risk of an uncertain event (the damage) is assumed by the insurer, while the policy holder's risk is tied to losing the paid premium. When such a contract is made in advance knowledge of likely occurrence of the event, the risk is fully shifted over to the insurer. Thus in absence of shared risk this subverts the contract into an unequivalent monetary transaction, which reasonably amounts to fraud. Similarly, if there's an advanced knowledge from the insurer on almost certain unlikelyhood of the event, then it's defrauding the policy holder of their premium. So the insurers must pay off time to time to maintain the perceived fairness of contracts. Meanwhile doing their best to balance their share of the risk... and most importantly price in the 'administrative overhead'.
jopsen 6y ago
Probably an unnecessary one... Most jurisdictions won't enforce a contract entered in bad faith. I'm no lawyer, but I would guess the hard part is detecting this behavior and/or getting the money back, not so much denying the payments. (Though flight insurances probably don't have much infrastructure for fighting fraud, as there is few ways to do insurance scams)
- nightcracker 6y ago
  > Most jurisdictions won't enforce a contract entered in bad faith. What? What exactly is bad faith here? How is buying insurance on things you expect to fail any different than, say, buying options on the stock market, or some other form of intelligent betting? You have expectation X, you find a third party that disagrees and has expectation Y, and agree to make a bet on the outcome with odds relative to X:Y. If your assessment of the situation was closer to the truth than the other party, you can stand to make money. The assumptions of the insurance company is that they have superior models and can amortize losses among many people and thus charge only a small margin. They don't always have the best models though, and I really don't see how calling them on it is 'bad faith'.
  - second--shift 6y ago
    > How is buying insurance on things you expect to fail any different than, say, buying options on the stock market, or some other form of intelligent betting? Insurance, unlike options on equity stock or indexes, require an insurable interest. The pricing of insurance assumes that the buyer of insurance would rather not use the insurance policy; the options contract on stock makes no such stipulation. They are a bit similar in practice but both are structured, regulated contracts and are defined differently. This lady did not have an "insurable interest" in the flights she was purchasing insurance on, since she did not actually intend to go on on the flight (she bought the insurance to profit from the insurance). Had she bought an "option" and not "insurance" on the flight, fraud maybe would not be in play. However, expect an "option" to be priced differently.
    - cellar_door 6y ago

vkou 6y ago

It's a bit like the clause about how you shouldn't be buying fire insurance for a house that is already in the process of burning down. It's not an unreasonable one.

greatpatton 6y ago
You analogy is incorrect as it would mean that she would buy the insurance when the flight is officially delayed. Here she is making a prediction, which may or may not be correct. It is exactly the same as when you are buying option or contract on the stock market. Here the issue is that the insurance company has a fixed premium which not based on the likelihood of delay. This is completely on the insurance side. Otherwise the stock market will have big issue if you apply the same analogy. This new clause is in effect a blanket one to not pay anything... if you pay for an insurance you have the conviction that the flight might be delayed... otherwise there would be no point to buy it....
- roenxi 6y ago
  The insurance company isn't a math problem; they are offering an explicitly bad deal. They are offering insurance on the basis that they will make a profit. Making that explicit in the contact is reasonable. If somebody thinks they are making money out of their insurance contract it is probably fraud or very close to.
  - rswail 6y ago
    My understanding is that insurance companies operate on pricing the contracts to cover their potential losses while making profit on investing the insurance premiums.
    - Cogito 6y ago
      Insurance companies, depending on the company and the line of business, will aim to make both an underwriting profit and an investment profit. If it is a particularly high premium line, and especially if there is a lot of competition, it's more likely that the underwriting profit will be kept minimal or even negative, as the investment profit is so much more lucrative. This is common in the car insurance lines of business, for example. For retail insurers there are a lot of moving parts here, and they will often not hold much of the final risk, so can't make money from investment anyway. For example, the retailer (sometimes an underwriting agency) may be underwritten by some bigger insurer. That insurer may have a quota share arrangement with another insurer (I'll take 10% of the risk, you take 90%) with a corresponding premium share. At each level reinsurance is bought, sometimes on the whole portfolio of risks and sometimes on particular classes of risk or specifc policies, and the costs associated with the reinsurance are priced into the retail premium. Additionally, when working in an intermediated market with brokers, there are often credit terms of up to 90 days where no payments are made. Anecdotally, it does seem like some brokers do make a large amount of their money on this float. Adding it all together, there are two main numbers to track from an underwriting profit point of view - your loss ratio (claims incurred / earned premiums, often extended to include projections for future claims and premium for future insured periods) and your combined operating ratio (COR) which includes expenses. There will be a loss ratio at which a line of business becomes profitable, and final premiums are often calculated by taking the expected losses and grossing up by this loss ratio. For individual accounts it might literally be that simple - "over the last 5 years this account has averaged claims of $100,000 a year, we need a 60% loss ratio so the premium should be $166,667." If there are extra reinsurance costs you might add those, and you might also add a loading for large infrequent losses that aren't captured in your underlying loss ratio (and another loading for catastrophes, a level above that). The combined ratio needs to be under 100% to be 'underwriting profitable'. I've seen CORs as high as 105-110%, but typically those portfolios were being very closely monitored/remediated/exited. If there is a strong market the COR is allowed to drift higher, but when the market tightens so does the COR.
- quietbritishjim 6y ago
  Perhaps it's more likely getting life insurance when you know you have a disease that is likely to be fatal (but not 100% guaranteed). Most life insurance policies would disallow that. At the very least they require you to disclose it, and if they still agree to insure you the premium would be much higher.
- unishark 6y ago
  I'm guessing you don't have this woman's inside knowledge of the airline system in China. You're assuming here that a person can't reasonably know or deduce a flight will be delayed, but her track record says different. Sometimes, often in fact, it becomes pretty obvious a flight will be delayed but they just haven't bothered to officially announce the fact yet. Such as if the plane isn't even there because they are delayed on the previous leg, and boarding time is about to start. Or when the airport cancels all flights for an indeterminate time due to incoming bad weather and the airlines wait to update times because they don't know what to say yet.
  - inimino 6y ago
    A certain flight out of a certain airport (I won't say which one) was routinely delayed to the point that passengers waiting for the inevitable compounding series of delay announcements (always after the predicted departure time had passed, and before the plane had showed up much less been boarded) would make small talk about it. Predicting that these flights would be delayed every. damn. time. was not difficult. However, if the insurance companies eliminate this face-saving measure for airlines then they may be forced to be realistic rather than maximally optimist in their departure estimates in the future (or simply be blacklisted by these kinds of insurance).
  - greatpatton 6y ago
    Yes I do know by experience that it is very easy to deduce if a flight will be delayed. By experience in Europe, last leg of the day of an Easyjet flight -> 75% chance that your flight will be delayed. Snow during the night (look at the forecast) -> 90% your morning flight will be delayed etc. etc. No need for an advance ML model. Of course what she did was more like insider trading, but I'm pretty sure that you don't even need that.
    - user5994461 6y ago
      The difficulty to make money out of this might be to determine the delay with some accuracy, not just that there will be some delays. Flight are routinely delayed by tens of minutes (has a low-cost flight ever left on time?) and that won't award compensation. European laws define mandatory compensations when a flight is delayed or cancelled. This starts after 30 minutes if I remember well and depends how long the delay is and how long (distance) the flight is. Also, delay is measured on arrival time, not on departure time. Planes frequently depart late then arrive on time, because they fly faster to catch up.
- notahacker 6y ago
  There's a big difference between buying a flight ticket and insuring it because of the possibility of its delay increasing your costs which you want to avoid and buying a flight ticket and insuring it because of the probability of its delay earning you a reward which you are actively seeking out in your choice of flights It's the difference between buying flood disruption insurance because you operate in an occasionally flooded area, and moving your stock to wherever there's a flood warning. Particularly in this case, where the woman cancelled her expected on-time tickets because the tickets had no value to her except as a source of insurance payouts. Consumer insurance is not exactly the same as stock options: it's not supposed to be a perfectly efficient market. Insurers are often operating under rules which prevent them from denying or repricing insurance due to relevant risk factors and likewise premium holders are usually bound by far more terms and conditions preventing them from taking actions which might change the value of their policy than stocks or futures markets.
franciscop 6y ago
As the sibling said "it would mean that she would buy the insurance when the flight is officially delayed" I think it's more like, you shouldn't buy fire insurance if you are having a bbq or similar. Or at least somewhere in the middle of these two statements.
Cthulhu_ 6y ago
You shouldn't be buying fire insurance if someone has said they were going to burn your house down. Or well you should, but if you wilfully had your house burn down anyway to get insurance money, that's insurance fraud.
wastedhours 6y ago
More like buying fire insurance for a house as you see an arsonist walking slowly toward it. You know what the expected outcome is going to be and are securing an agreement deliberately in bad faith. That's not to say insurance companies are always good faith actors (oftentimes not), but it's a very one-sided information flow.
- SkyBelow 6y ago
  If there has been a rise in arson cases in my city that finally convinces me to get fire insurance, is that in bad faith? I have a reason to believe my house is now more at risk of burning down, so I'm buying insurance. It seems a much more realistic scenario than the one of having a arsonist slowly approaching a house (and even then, arsonist in general do not burn down most the buildings they approach throughout their lifetime, and even more so when you could individual approaches that result in arson). What about someone who notices that they are getting older and are starting to develop aches and pains and decides to start buying health insurance that they had avoided when they were younger because they seemed to have been made out of rubber back then?
  - wastedhours 6y ago
    The fact there's so many ifs and buts shows this can't be a clear line. In the eyes of the law, it's about the intent of the action - which is why the ambiguity at the Terms and Conditions level is probably for the best. Yeah, your first argument makes a lot more sense to normal situations, but mine was aimed at being an analogy to the example at hand from the article.
  - webmaven 6y ago
    > What about someone who notices that they are getting older and are starting to develop aches and pains and decides to start buying health insurance that they had avoided when they were younger because they seemed to have been made out of rubber back then? That's exactly the reason the ACA made health insurance mandatory, to avoid that scenario which would require insurance companies to make the policies more expensive in order to compensate for the higher average age and worsening average health of the insured pool, which further incentivizes the avoidance, and so on, until we're right back in the same situation with a high-risk pool and unaffordable premiums. Incidentally, that doesn't mean that avoiding health insurance if you are young and healthy with no dependents is actually a good idea at the outset, since many common health conditions like injuries from car accidents don't particularly discriminate by age.

csunbird 6y ago

This is extremely ambiguous, the insurance company may refuse to pay any insurer at all based on this clause.

close04 6y ago
This may be treated as "insider knowledge" but I expect the burden is on the insurance company to prove prior knowledge. But "reasonably deduces"... that can be used in any such case where mass payouts are a likely outcome. If I can "reasonably deduce" a payout will be needed than so can the insurance company. Under these conditions accepting my insurance purchase should be seen as the company committing fraud. They accept a payment knowing the customer can never collect.
- rswail 6y ago
  Note that it's "reasonably deduces" at the time of buying the insurance contract. So it's not like the insurance company can say "you should have cancelled the night before because everyone could see the storm coming".
  - close04 6y ago
    I think I addressed it pretty clearly before. If a regular consumer can "reasonably" deduce (using logic, not some "illegal" insider knowledge) at the time of buying the insurance policy that the flight may be cancelled then the insurance company employing experts and very accurate statistical models can more than reasonably make the same deduction. Now since we agree that both parties deduced the flight will be cancelled but the company still went ahead and took the money for the insurance contract, this can only be fraud. The company took the money under false pretenses since they implicitly know even before the transaction that the claim is null and void under the "reasonable deduction" paragraph.
  - ErikVandeWater 6y ago
    The reason people buy flight insurance is because they reasonably deduce the flight might be cancelled.

ashtonkem 6y ago

One that is extremely narrow in scope. In this case, continual purchasing of insurance on the flights likely to be delayed would be evidence you knew it was going to be delayed.

fendy3002 6y ago
IMO, the problem is how to prove / what is the condition. Without clear condition / clauses, it is possible that they'll deny valid claims by saying that the insured has already know beforehand. Maybe there are more specific information?

WhompingWindows 6y ago

Is there any legal definition/precedent of "reasonably deduces"? Have companies attempted this kind of blockage before?

dfxm12 6y ago
There is a definition. https://www.trans-lex.org/902000/_/standard-of-reasonableness/ https://www.trans-lex.org/902000/_/standard-of-reasonablenes... https://en.wikipedia.org/wiki/Reasonable_person https://en.wikipedia.org/wiki/Reasonable_person That doesn't mean there's no grey area, though. Is it unreasonable to buy tickets and insurance under an assumed identity? Probably, but part of getting your day in court having the ability to suss this out.

zoomablemind 6y ago

I think the main point is about risk distribution. In a normal insurance contract the main risk of an uncertain event (the damage) is assumed by the insurer, while the policy holder's risk is tied to losing the paid premium. When such a contract is made in advance knowledge of likely occurrence of the event, the risk is fully shifted over to the insurer. Thus in absence of shared risk this subverts the contract into an unequivalent monetary transaction, which reasonably amounts to fraud. Similarly, if there's an advanced knowledge from the insurer on almost certain unlikelyhood of the event, then it's defrauding the policy holder of their premium. So the insurers must pay off time to time to maintain the perceived fairness of contracts. Meanwhile doing their best to balance their share of the risk... and most importantly price in the 'administrative overhead'.

jopsen 6y ago

Probably an unnecessary one... Most jurisdictions won't enforce a contract entered in bad faith. I'm no lawyer, but I would guess the hard part is detecting this behavior and/or getting the money back, not so much denying the payments. (Though flight insurances probably don't have much infrastructure for fighting fraud, as there is few ways to do insurance scams)

nightcracker 6y ago
> Most jurisdictions won't enforce a contract entered in bad faith. What? What exactly is bad faith here? How is buying insurance on things you expect to fail any different than, say, buying options on the stock market, or some other form of intelligent betting? You have expectation X, you find a third party that disagrees and has expectation Y, and agree to make a bet on the outcome with odds relative to X:Y. If your assessment of the situation was closer to the truth than the other party, you can stand to make money. The assumptions of the insurance company is that they have superior models and can amortize losses among many people and thus charge only a small margin. They don't always have the best models though, and I really don't see how calling them on it is 'bad faith'.
- second--shift 6y ago
  > How is buying insurance on things you expect to fail any different than, say, buying options on the stock market, or some other form of intelligent betting? Insurance, unlike options on equity stock or indexes, require an insurable interest. The pricing of insurance assumes that the buyer of insurance would rather not use the insurance policy; the options contract on stock makes no such stipulation. They are a bit similar in practice but both are structured, regulated contracts and are defined differently. This lady did not have an "insurable interest" in the flights she was purchasing insurance on, since she did not actually intend to go on on the flight (she bought the insurance to profit from the insurance). Had she bought an "option" and not "insurance" on the flight, fraud maybe would not be in play. However, expect an "option" to be priced differently.
  - cellar_door 6y ago