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That's also why insurance gets so expensive. Insurance spreads out risk. It doesn't lower it.
by macksd 4y ago
That's also why insurance gets so expensive. Insurance spreads out risk. It doesn't lower it.
- fibers 4y agois it? my insurance is relatively affordable, more affordable than the rent increases that keep coming year over year by greedy developers.
- macksd 4y agoI'm not sure what you're saying "is it" to. If your insurance does not go up when living in an area with conditions like downtown SF right now, it's only because you're in a risk pool with other people not having those problems. It still does no good to deny those problems like it isn't a clear breakdown of society. And if you're talking about San Francisco your rent is hardly a baseline of affordable as you said, so I'm not sure why you make that comparison or why greedy developers price gouging is somehow NOT also a sign of dysfunctional society.
- HPsquared 4y agoInsurance can definitely reduce risk if its cost or availability is tied to risk-reducing measures (giving the policyholder an incentive). For example a health policy requiring health check-ups, or insisting on security or safety measures for a home policy. Or, in a weaker form, giving a discount if the customer can demonstrate they are reducing their risk. There's also the direct intervention side: in theory, an insurance company covering people in an area for theft could lobby for improved policing. Or a car insurance company could lobby for car safety measures. In practice though they probably prefer the higher risk as that brings higher premiums...