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Huh the insurance test does sound pretty smart. Though I imagine some insurance products might not be quoted at all to any random person?

bombcar 3y ago
It’s not perfect, but it at least gets you thinking. Because the adjusters have to price the risk objectively - house burn down? Risk relatively low. Submarine go pop? Probably not insurable at any price - either because risk is too high or they can’t evaluate it. And if they can’t, you likely can’t, unless you’re Cameron or someone similar. That doesn’t mean uninsurable risks aren’t worth taking sometimes. Just be aware and realistic.
- CharlesW 3y ago
  > Probably not insurable at any price - either because risk is too high or they can’t evaluate it. FWIW, fatal experimental submarine accidents aren't the weirdest thing insurers have insured. https://havenlife.com/blog/craziest-things-insured-lloyds-london/ https://havenlife.com/blog/craziest-things-insured-lloyds-lo...
  - HWR_14 3y ago
    Those are all just extra insurance against injuries that are well known, e.g. a broken leg. They are just extra payouts in case something happens
- BoxFour 3y ago
  There are lots of extremely high-risk things that can still be insured. As a simple example you can get a new life insurance policy as an 89 year old with some generic insurance providers—-it’ll cost you, though, obviously. Even if you put the risk of death ridiculously high (say, 90%) for each trip, it probably wouldn’t be impossible to insure it. The premium per trip would just likely be roughly the maximum payout and so it wouldn’t necessarily be worth it.
  - MichaelZuo 3y ago
    That sounds really incredible, a 89 year old getting a new life insurance plan? Can you link to one of the providers?
    - LorenPechtel 3y ago
      It doesn't surprise me at all. The customers of such policies are quite wealthy and have no actual need of life insurance. Rather, it's an estate tax dodge because life insurance proceeds are tax free.
    - CSMastermind 3y ago
      They might be thinking of whole life vs term life policies. Whole life policies are basically investment vehicles that are an attractive asset class to a specific segment of the population because of tax reasons. For those unaware term life pays out if you die within a certain time period. There's a chance that they won't pay out - you're pooling your risk of dying along with that of other people because statistically you're not all likely to die. So the premiums you pay in go to pay out someone who does in fact die. For whole life the policy is for well your whole life - so the payout rate is 100% because everyone dies eventually. People take out whole life policies which they pay premiums into and those policies accumulate value allowing them to take out loans against the value of the policy. And because of a tax loophole in the United States this allows you to avoid paying taxes on the (what is essentially) investment dividends. When I worked in the industry the cut off for term life at almost every carrier was 65 years old, though I vaguely remember people introducing policies for 70 year olds which might be a false memory. Whole life can obviously be sold no matter how old you are. A 103 year old could probably find a carrier willing to issue them a whole life policy for the right price.
    - bombcar 3y ago
      There was a whole thing called a tontine that basically worked like inverse life insurance. The insurers just look at the tables and give you what it will cost. It looks like an 89 year old has between 4-5 years life expectancy so expect to pay in premiums about 20% of the payout. Usually the payout is “burial insurance” at these ages.
SirSourdough 3y ago
I’m sure it’s not the case that any random person can get a quote for something like this, but in the case of Titan the people who can afford the $250k ticket probably can.
jprete 3y ago
If someone can't even get an insurance quote, that is a very bad sign by itself that what they're proposing is already too risky.
- ghaff 3y ago
  Or that insurance companies (in general) have no way to evaluate the risk and therefore make a business decision not to play craps with their shareholder's money (and possibly their careers).
  - thunfischbrot 3y ago
    Which is similarly a sign that you might(!) also not be able to evaluate the risk.
- marsten 3y ago
  On the other hand, insurance companies may have no interest underwriting unusual risks when the business opportunity is small. "Deep-sea submarine tourism" is a tiny market.
steveBK123 3y ago
Lloyd's of London has entered the chat

bombcar 3y ago

It’s not perfect, but it at least gets you thinking. Because the adjusters have to price the risk objectively - house burn down? Risk relatively low. Submarine go pop? Probably not insurable at any price - either because risk is too high or they can’t evaluate it. And if they can’t, you likely can’t, unless you’re Cameron or someone similar. That doesn’t mean uninsurable risks aren’t worth taking sometimes. Just be aware and realistic.

CharlesW 3y ago
> Probably not insurable at any price - either because risk is too high or they can’t evaluate it. FWIW, fatal experimental submarine accidents aren't the weirdest thing insurers have insured. https://havenlife.com/blog/craziest-things-insured-lloyds-london/ https://havenlife.com/blog/craziest-things-insured-lloyds-lo...
- HWR_14 3y ago
  Those are all just extra insurance against injuries that are well known, e.g. a broken leg. They are just extra payouts in case something happens
BoxFour 3y ago
There are lots of extremely high-risk things that can still be insured. As a simple example you can get a new life insurance policy as an 89 year old with some generic insurance providers—-it’ll cost you, though, obviously. Even if you put the risk of death ridiculously high (say, 90%) for each trip, it probably wouldn’t be impossible to insure it. The premium per trip would just likely be roughly the maximum payout and so it wouldn’t necessarily be worth it.
- MichaelZuo 3y ago
  That sounds really incredible, a 89 year old getting a new life insurance plan? Can you link to one of the providers?
  - LorenPechtel 3y ago
    It doesn't surprise me at all. The customers of such policies are quite wealthy and have no actual need of life insurance. Rather, it's an estate tax dodge because life insurance proceeds are tax free.
  - CSMastermind 3y ago
    They might be thinking of whole life vs term life policies. Whole life policies are basically investment vehicles that are an attractive asset class to a specific segment of the population because of tax reasons. For those unaware term life pays out if you die within a certain time period. There's a chance that they won't pay out - you're pooling your risk of dying along with that of other people because statistically you're not all likely to die. So the premiums you pay in go to pay out someone who does in fact die. For whole life the policy is for well your whole life - so the payout rate is 100% because everyone dies eventually. People take out whole life policies which they pay premiums into and those policies accumulate value allowing them to take out loans against the value of the policy. And because of a tax loophole in the United States this allows you to avoid paying taxes on the (what is essentially) investment dividends. When I worked in the industry the cut off for term life at almost every carrier was 65 years old, though I vaguely remember people introducing policies for 70 year olds which might be a false memory. Whole life can obviously be sold no matter how old you are. A 103 year old could probably find a carrier willing to issue them a whole life policy for the right price.
  - bombcar 3y ago
    There was a whole thing called a tontine that basically worked like inverse life insurance. The insurers just look at the tables and give you what it will cost. It looks like an 89 year old has between 4-5 years life expectancy so expect to pay in premiums about 20% of the payout. Usually the payout is “burial insurance” at these ages.

SirSourdough 3y ago

I’m sure it’s not the case that any random person can get a quote for something like this, but in the case of Titan the people who can afford the $250k ticket probably can.

jprete 3y ago

If someone can't even get an insurance quote, that is a very bad sign by itself that what they're proposing is already too risky.

ghaff 3y ago
Or that insurance companies (in general) have no way to evaluate the risk and therefore make a business decision not to play craps with their shareholder's money (and possibly their careers).
- thunfischbrot 3y ago
  Which is similarly a sign that you might(!) also not be able to evaluate the risk.
marsten 3y ago
On the other hand, insurance companies may have no interest underwriting unusual risks when the business opportunity is small. "Deep-sea submarine tourism" is a tiny market.

steveBK123 3y ago

Lloyd's of London has entered the chat