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>Just get a household appliances insurance policy. Any insurance is a conflict of interest. The entity responsible for paying out is the same entity responsibl

>Just get a household appliances insurance policy. Any insurance is a conflict of interest. The entity responsible for paying out is the same entity responsible for if/how much you get paid out. Any for-profit insurance company is incentivized to pay out as little as possible, if any. Any litigation is likely to cost way more than the payout.

traceroute66 5y ago
> Any insurance is a conflict of interest. The entity responsible for paying out is the same entity responsible for if/how much you get paid out. What are you on about ? Let me spell out how my appliances insurance policy works: 1. I call $insurance_company and say "my appliance is broken" 2. $insurance_company says "Ok, here's a code, call Miele, give them the code" 3. Miele sends out engineer with parts who fixes the appliance 4. I sign engineer's job sheet. 5. The end. To reiterate: - At no point have I given Miele my credit card. - At no point have I given the Miele engineer my credit card. - At no point have I received a bill from Miele. - At no point have I paid Miele in any way shape or form - $insurance_company has taken care of everything, 100% of everything, every single time.
- Clubber 5y ago
  You must not live in the US. I see it's a German company, they have much stronger laws governing how they operate. In the US, there are laws, but they are scantly enforced. "Buyer beware." Corruption is gonna crash the insurance industry before too long.
- bombela 5y ago
  But how much does the insurance cost? Are you positive this insurance, over the years, is cheaper than what you would have paid Miele directly?
  - traceroute66 5y ago
    > But how much does the insurance cost? Mine is about 350 a year, but they work out a rate per-appliance and then give a discount on the total, so you can pay more (or less) depending on how many appliances you cover. > Are you positive this insurance, over the years, is cheaper than what you would have paid Miele directly? Absolutely. A Miele call-out will set you back 150 call-out + 100/hour, plus parts on top. Or (if Miele agree) you can pay a "fixed-price" 300 which covers parts and labour (but again, this is subject to Miele's agreement and that agreement is given on a per call-out evaluation). And as I said, one of my Miele appliances is 10+ years old, they've been back a good few times replacing increasingly major parts each time, so now the only thing 10+ years old about it is the external casing ! Even if I bought the "official" Miele parts myself, I value my time at greater than zero ! So its still cheaper than me buying the parts and spending a half a day pulling out appliances and fitting parts. And given the price of new Miele appliances, its not exactly like after 5 years I could afford to replace everything with brand new appliances, since that would cost A LOT more than 350x5.
    - TylerE 5y ago
      Begs the question of why you keep buying Miele. I've had exactly one home appliance failure in the last 10 years - an old fridge that finally died.
    - deleted 5y ago
      [deleted]
    - throwawayboise 5y ago
      And yet, on average, the insurance company must be making a profit on their Miele policies otherwise they would not sell them or would not stay in business. It sounds like you have a lemon appliance and were fortunate that you had the insurance.
ethbr0 5y ago
> Any insurance is a conflict of interest. * * Except group catastrophic Ultimately, it's a math problem that must have a positive answer for the insurance company. If 100% of policyholders make claims, you generally pay that profit yourself. However, in group catastrophic policy, the numbers add up. Substantially <100% of people file claims, so premiums can be set much lower, effectively giving you protection against an unlikely scenario at reasonable cost. My grandfather was an actuary, and constantly griped that low-deductible policies shouldn't even be called "insurance." If you want to create something like a national health benefit, do so. But don't confuse people by mislabeling it.
- Aerroon 5y ago
  >Ultimately, it's a math problem that must have a positive answer for the insurance company. If 100% of policyholders make claims, you generally pay that profit yourself. Not necessarily. Simply holding onto large piles of other people's money can he profitable - eg banks.
  - pc86 5y ago
    That's part of the math problem.
- dragonwriter 5y ago
  Group catastrophic, like all other insurance, is negative expected value in first-order effects, but improves predictability. This is not fundamentally different from low-deductible policies. (Which may do more, proportionately to cost, to improve predictability if most variance is the number of frequency of low-cost events)
  - throwawayboise 5y ago
    For those who use them. I avoid doctors as much as possible, so if I see one it is likely closer to a catastrophic situation than routine. I would much rather have cheap catastrophic insurance than more expensive low-deductible, because I am unlikely to use the latter.
Joeri 5y ago
It seems to me insurance companies must break into two categories. The first are honest agents operating on a house-always-wins model. Meaning, over a sufficiently large time and sufficiently large customer base they pay out less than they receive, but only a normal cost + profit margin amount less. Pay out more than that and they go out of business. The second category would be dishonest agents, which try to avoid payout and have windfall profits and basically skirt the line where lawsuits and reputational damage make that kind of profit impossible. Long term operation as such a business is challenging due to word of mouth, so they must often rebrand or change business names, or just make their products too confusing to understand.

traceroute66 5y ago

> Any insurance is a conflict of interest. The entity responsible for paying out is the same entity responsible for if/how much you get paid out. What are you on about ? Let me spell out how my appliances insurance policy works: 1. I call $insurance_company and say "my appliance is broken" 2. $insurance_company says "Ok, here's a code, call Miele, give them the code" 3. Miele sends out engineer with parts who fixes the appliance 4. I sign engineer's job sheet. 5. The end. To reiterate: - At no point have I given Miele my credit card. - At no point have I given the Miele engineer my credit card. - At no point have I received a bill from Miele. - At no point have I paid Miele in any way shape or form - $insurance_company has taken care of everything, 100% of everything, every single time.

Clubber 5y ago
You must not live in the US. I see it's a German company, they have much stronger laws governing how they operate. In the US, there are laws, but they are scantly enforced. "Buyer beware." Corruption is gonna crash the insurance industry before too long.
bombela 5y ago
But how much does the insurance cost? Are you positive this insurance, over the years, is cheaper than what you would have paid Miele directly?
- traceroute66 5y ago
  > But how much does the insurance cost? Mine is about 350 a year, but they work out a rate per-appliance and then give a discount on the total, so you can pay more (or less) depending on how many appliances you cover. > Are you positive this insurance, over the years, is cheaper than what you would have paid Miele directly? Absolutely. A Miele call-out will set you back 150 call-out + 100/hour, plus parts on top. Or (if Miele agree) you can pay a "fixed-price" 300 which covers parts and labour (but again, this is subject to Miele's agreement and that agreement is given on a per call-out evaluation). And as I said, one of my Miele appliances is 10+ years old, they've been back a good few times replacing increasingly major parts each time, so now the only thing 10+ years old about it is the external casing ! Even if I bought the "official" Miele parts myself, I value my time at greater than zero ! So its still cheaper than me buying the parts and spending a half a day pulling out appliances and fitting parts. And given the price of new Miele appliances, its not exactly like after 5 years I could afford to replace everything with brand new appliances, since that would cost A LOT more than 350x5.
  - TylerE 5y ago
    Begs the question of why you keep buying Miele. I've had exactly one home appliance failure in the last 10 years - an old fridge that finally died.
  - deleted 5y ago
    [deleted]
  - throwawayboise 5y ago
    And yet, on average, the insurance company must be making a profit on their Miele policies otherwise they would not sell them or would not stay in business. It sounds like you have a lemon appliance and were fortunate that you had the insurance.

ethbr0 5y ago

> Any insurance is a conflict of interest. * * Except group catastrophic Ultimately, it's a math problem that must have a positive answer for the insurance company. If 100% of policyholders make claims, you generally pay that profit yourself. However, in group catastrophic policy, the numbers add up. Substantially <100% of people file claims, so premiums can be set much lower, effectively giving you protection against an unlikely scenario at reasonable cost. My grandfather was an actuary, and constantly griped that low-deductible policies shouldn't even be called "insurance." If you want to create something like a national health benefit, do so. But don't confuse people by mislabeling it.

Aerroon 5y ago
>Ultimately, it's a math problem that must have a positive answer for the insurance company. If 100% of policyholders make claims, you generally pay that profit yourself. Not necessarily. Simply holding onto large piles of other people's money can he profitable - eg banks.
- pc86 5y ago
  That's part of the math problem.
dragonwriter 5y ago
Group catastrophic, like all other insurance, is negative expected value in first-order effects, but improves predictability. This is not fundamentally different from low-deductible policies. (Which may do more, proportionately to cost, to improve predictability if most variance is the number of frequency of low-cost events)
- throwawayboise 5y ago
  For those who use them. I avoid doctors as much as possible, so if I see one it is likely closer to a catastrophic situation than routine. I would much rather have cheap catastrophic insurance than more expensive low-deductible, because I am unlikely to use the latter.

Joeri 5y ago

It seems to me insurance companies must break into two categories. The first are honest agents operating on a house-always-wins model. Meaning, over a sufficiently large time and sufficiently large customer base they pay out less than they receive, but only a normal cost + profit margin amount less. Pay out more than that and they go out of business. The second category would be dishonest agents, which try to avoid payout and have windfall profits and basically skirt the line where lawsuits and reputational damage make that kind of profit impossible. Long term operation as such a business is challenging due to word of mouth, so they must often rebrand or change business names, or just make their products too confusing to understand.